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Leaders of Israel's two main political blocs, Likud and Labor, agreed Monday to form a coalition government, media reports said. State-run Israel radio and Israel television both reported that the two parties reached agreement when Likud's Prime Minister Yitzhak Shamir agreed to demands by the center-left Labor Party that Labor be given leadership of the powerful parliament finance committee. Avi Pazner, a top aide to Shamir, said agreement had been reached on major issues but that the prime minister was still trying to get smaller religious and nationalist parties to join a broad coalition. "We cannot drink `L'chaim' yet," he said, referring to the traditional Hebrew toast meaning "to life."

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