Israeli Prime Minister Binyamin Netanyahu has reached a deal for a governing coalition in which a new centrist party will serve as his main partner, a spokeswoman for his right-wing Likud party has said.

“There is a government,” the spokeswoman, Noga Katz, said on Thursday.

She said Netanyahu’s Likud-Beitenu list would be allied with centrist Yesh Atid led by political newcomer Yair Lapid and far-right Jewish Home, headed by high-tech millionaire Naftali Bennett.

It will include a smaller centrist faction led by former Foreign Minister Tzipi Livni and control at least 68 seats in the 120-member parliament.

“The next term will be one of the most challenging in the history of the state,” Netanyahu told his Likud-Yisrael Beitenu parliamentary faction Thursday, shortly before the deal was to be signed. “We are facing great security and diplomatic challenges.”

Coalition agreement signing ceremonies were expected later in the day, with a new government likely to take office next week before a visit by US President Barack Obama.

Israel held a general election in January in which centrists made surprising gains at the expense of Netanyahu’s conservative Likud-Beitenu party.

Netanyahu’s traditional coalition allies, ultra-Orthodox parties now at odds with Yesh Atid and Jewish Home over social benefits and military draft exemptions for religious Jews, will not be in the new coalition.

Netanyahu is likely to face many disgruntled members in his own Likud Party, which was forced to give up key Cabinet posts to appease Lapid.

Zeev Elkin, a Likud lawmaker, accused Lapid of “extortion.”

“There is no other expression to describe it,” he told Israel Radio.

Arieh Deri, leader of the ultra-Orthodox Shas party, told Army radio that he will join a fighting opposition.

“Our first mission is to topple this government,” he said.

(Agencies and Al Jazeera- Aljazeera.com)