Olmert signs coalition agreement with Labour

Israel moved closer to a new government today when Prime Minister Ehud Olmert’s Kadima party signed a coalition accord with its main partner, the Labour Party.

It has boosted the chances for his unilateral plan to set Israel’s borders by 2010.

The formal signing ceremony followed weeks of negotiations following Kadima’s narrow victory in March elections.

The two parties agree on the West Bank redeployment but haggled over economic issues and division of Cabinet portfolios.