Israeli prime minister-designate Benjamin Netanyahu moved closer to securing a new government after last month's election by reaching a coalition deal with the far-right Religious Zionism party, his Likud party said on Thursday.
Likud said Religious Zionism would be given control of the Finance Ministry as part of a rotation, without saying how the arrangement would work.
It will also have strong influence over policies in the occupied West Bank and the country's justice system.
The deal gives Mr Netanyahu control of 46 of the Knesset's 120 seats so far.
Israel's Army Radio reported that Bezalel Smotrich, 42, who leads Religious Zionism, would be Finance Minister at the outset and later be replaced.
His party, which opposes Palestinian statehood and supports extending Israeli sovereignty into the West Bank, will be given authority over Jewish settlement activity there, although it will be in co-ordination with Mr Netanyahu, Likud said.
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"This is another significant step bringing us closer to forming a right-wing, nationalist government that will look out for all Israeli citizens," Mr Netanyahu said.
The agreement comes after his right-wing alliance won a comfortable victory in a November 1 election, Israel's fifth in less than four years.
Israel captured the West Bank, Gaza and East Jerusalem — areas that Palestinians want for a state — in the 1967 Arab-Israeli war.
US-sponsored negotiations stalled in 2014 but the expansion of settlements has continued despite international opposition.
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Mr Smotrich is better known for his nationalistic politics than his economic views.
He ran together with far-right ally Itamar Ben-Gvir, although they now lead separate factions in the Knesset.
Mr Ben-Gvir has already signed up with Mr Netanyahu after being promised the National Security Ministry, a newly created portfolio with powers over police in Israel and the West Bank.
Mr Smotrich served briefly in a Netanyahu-led government as transport minister, from 2019 to 2020.
He advocates conservative fiscal policies such as lowering the debt-to-GDP ratio, favours a universal tax decrease on businesses and hopes to rein in public-sector strikes.
