The NUP, which joins the Sharon's dominant Likud party, the National Union Party and the secular centre-right party Shinui, is strongly opposed to the creation of a Palestinian state and an ardent supporter of the expansion of Israeli settlements in the West Bank and Gaza.

Although it is the first time that ultra-Orthodox parties have not been part of a Likud government, the coalition does not the balancing influence of the centre-left Labour party. 'This agreement means the next government will be unable to produce any balanced policies on the peace process,' chief Palestinian negotiator Saeb Erekat said. 'There will be no chance left for peace.'