Israel's centre-right secular Shinui party has joined Prime Minister Ariel Sharon's Likud party in a coalition. The move gives Mr Sharon a slim majority in parliament that will allow him to form a government, a spokesman for the prime minister said. Mr Sharon's agreement with Shinui comes a day after the far-right National Religious Party also joined the government.

The moves sank any possibility of a national unity coalition with the centre-left Labour Party, which opposed the inclusion of the NRP - the voice of the settler movement.

In the wake of last month's general election, Mr Sharon had sought a wide coalition to include Labour.

But the two parties disagreed fundamentally on how to deal with the Palestinian uprising, or intifada.

The coalition gives Mr Sharon a two-seat majority in the 120-member Knesset.

Mr Sharon is expected to present his government for parliamentary approval on Thursday.

The coalition marks the first time that ultra-Orthodox parties - the traditional kingmakers of Israeli politics - are not part of a Likud government.

The spiritual leader of the ultra-Orthodox Shas Party, Rabbi Ovadia Yosef, angrily referred to Mr Sharon as the "prime minister of garbage cans", Israel Radio reported.

The government line-up, as expected, also provoked a strong reaction from the Palestinians.

Palestinian cabinet minister Saeb Erekat condemned Mr Sharon for including the NRP in the coalition, the Associated Press reported.

"The have sent the road map into the archives along with the Mitchell and Tenet understandings," he said, in a reference to international efforts to promote peace moves.

The BBC's Barbara Plett in Jerusalem says the Shinui party will probably bring a more secular face to the government.

Peace Policies

Shinui members campaigned on a platform of loosening ties between religion and state.

But their policy towards the Palestinians is much less clear.

Shinui leader Tommy Lapid has said he takes a pragmatic approach: there should be negotiations but not with Palestinian leader Yasser Arafat.

However, their coalition partners, the NPR, have definite views on the Palestinian issue.

They reject the creation of a Palestinian state and advocate expanding Israeli Shinui is to be given five cabinet portfolios:

Justice, Interior, National Infrastructures, Environment, and Technology and Science, Israeli radio said.

Mr Lapid is set to be named as justice minister.

The NRP is to get two cabinet seats: Housing and Construction and the Labour and Social Affairs.

Israeli officials say Mr Sharon is still trying to expand his coalition by negotiating with an extreme right-wing party, the National Union.

Our correspondent says this suggests he has resigned himself to a government that is nationalist and right-wing.

In the election on 28 January, Likud won 38 seats in parliament, while Labour had its worst ever showing, with just 19 seats.

Likud subsequently merged with a small immigrants rights party to take its numbers to 40.

settlements in the occupied territories.

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His government is set to be right-wing and secular