Israeli Prime Minister Benjamin Netanyahu succeeded in forming a new government, mustering the slimmest margin possible to reach a majority in parliament and earn a fourth term in office.

Netanyahu topped off his coalition government by striking a last-minute agreement with the Jewish Home party — a religious faction committed to expanding West Bank settlements — giving him 61 seats in the 120-member Knesset.

It took his Likud party negotiators seven weeks to cobble together the alliance.

The prime minister and Jewish Home leader Naftali Bennett announced the accord at the parliament in Jerusalem late on Wednesday, less than an hour before the midnight deadline.

"Sixty-one is a good number," Netanyahu said. "Sixty-one-plus is a better number, but we’ll start with 61."

The narrow majority leaves Netanyahu, 65, with a precarious hold on power. All his allies have the potential to trigger new elections by withdrawing from the coalition. That means campaign pledges to bring down soaring real estate prices and stimulate competition among banks could fall victim to the weakness of the new administration.

'Susceptible to Blackmail'

"It’s susceptible to blackmail from every party," said Jonathan Spyer, director of the Rubin Center for Research in International Affairs in Herzliya, suggesting that the agreement may be a stopgap measure before Netanyahu bolsters the coalition later with new members. "There will be other chapters, or it will fail."

Palestinians said Netanyahu’s coalition would be unable and unwilling to advance the peace process.

"The formation of the new Israeli government now lacks any moderate party in it, and the only result will be a more radical approach and repression in the Palestinian Territories," Palestine Liberation Organization Executive Committee member Hanna Amira told Voice of Palestine radio.

Amira added that Jewish Home’s control of the justice and agriculture ministries would aid it in pursuing its pro-settlement policies.

Netanyahu said he would continue negotiations with other parties to expand the coalition.

Following protocol, he informed President Reuven Rivlin that he had assembled a majority and will formally present the government for parliamentary approval next week, Rivlin’s office said in an emailed statement.

Likud party spokesman Nir Hefetz told Israel Radio that Netanyahu will retain the Foreign Ministry post for himself in the meantime, in the hope that opposition leader Isaac Herzog might eventually join the government.

Herzog, whose Zionist Union won 24 seats to Likud's 30 in the March 17 election, said he won’t join a Netanyahu-led government and predicted the coalition would quickly collapse. "A government of failure has risen here today," he said on his Facebook page.

Israel’s benchmark TA-25 Index for stocks opened 0.1 percent down on Thursday, to 1,620.84 at 9:56 a.m. in Tel Aviv trading. The shekel was little changed at 3.8533 against the dollar.

Budget Approval

Netanyahu will probably be able to secure parliamentary approval of the government’s overdue budget, Yaniv Pagot, chief strategist at Ayalon Group in Ramat Gan, said before the announcement.

More ambitious reforms advocated by the finance minister-designate, Moshe Kahlon, will be challenging, said Noam Gruber, senior researcher at the Shoresh Institution, a center for socio-economic research.

"A coalition of 61 Knesset members will make it difficult to do anything significant, unless they get support from the opposition," Gruber said. "Some of the things that Kahlon is talking about are significant steps; for example, taxing investors and the decentralization of the Israel Land Authority’s powers."

Netanyahu’s previous administration collapsed barely two years into its term, when the premier fired his finance and justice ministers and said the coalition of 68 lawmakers was too narrow to pursue his political agenda. The new lineup will make it even harder, Spyer said.

Netanyahu’s efforts to form a more stable coalition were stymied when Foreign Minister Avigdor Liberman resigned on Tuesday and said his Yisrael Beytenu party wouldn’t join the government.

The task was also complicated by Netanyahu’s strained personal relationship with Bennett, the economy minister in the outgoing coalition, who once served as the prime minister’s chief of staff.

Bennett will be education minister in the new government and Jewish Home colleague Ayelet Shaked will be justice minister, the party said.