Jerusalem (TPS) – The Likud and Yisrael Beiteinu parties have signed a coalition agreement in the Knesset on Wednesday, formally confirming that Avigdor Liberman will be appointed next week as defense minister and that his party will be joining the coalition.

“Israel needs government stability,” said Netanyahu in a joint press conference with Liberman. “I accept Liberman and his party members as equal partners in the coalition. We have come a long way together, and are committed to working together for the benefit of all Israeli citizens. We will continue preserving the security of the Israeli people.”

“The most important issue at hand is ensuring the safety of Israeli citizens,” agreed Liberman. “I intend to work in close cooperation with Netanyahu and with the IDF chief of staff.”

“I have a strong commitment to promote peace and understanding between us and our neighbors,” added Liberman, who has often taken hardline positions in dealing with Palestinian terrorism and peace negotiations. “I am committed to a responsible and reasonable security policy in order to bring stability.”

“I am committed to peace and to the efforts to achieve peace,” said Netanyahu. “I agree with Isaac Herzog’s statements this week that there is a historic opportunity for regional change at this time,” he added, referring to opposition head and Zionist Union party chairman. “I therefore call on his party to join my government.”

“We have had disagreements in the past, like always in politics, but we have settled them,” added Netanyahu, referring to Liberman’s frequent strongly-worded attacks against Netanyahu in the past year, including his comments a few weeks ago calling Netanyahu a “liar” and a “con-man.”

Liberman offered an apology with a joke. “Unnecessary comments have been made in the past, and I have undergone surgery to extend my short fuse,” he told Netanyahu. “I thank you for your ability to overcome our disagreements.”

Although Netanyahu reached a provisional arrangement with Liberman last week that would grant him the Defense Ministry portfolio, the official agreement was held up due to a demand by Liberman – a Moldovan immigrant to Israel – to implement pension reform for immigrants from the former Soviet Union.

The agreement reached with Kahlon will transfer 1.4 billion shekels (about US$360 million) for pension reform, which was half the amount requested by Yisrael Beiteinu. Additionally, the new funds will serve the population at large and not just immigrants from the former Soviet Union.

While Netanyahu overcame his hurdle with Liberman, the prime minister is still facing a threat from Education Minister and Jewish Home Party Chairman Naftali Bennett to oppose any expansion of the coalition without reforms giving members of the security cabinet more access to sensitive military intelligence.

“We are not demanding changes. We are not demanding budgets. We are demanding to save lives,” read a statement by Jewish Home shortly after the coalition agreement was reached between Netanyahu and Liberman.

Bennett’s demand follows a recent report showing that there were flaws in intelligence sharing with cabinet members during Operation Protective Edge. Bennett is recommending that there be a permanent military secretary to help facilitate the process of intelligence sharing to ministers.

The Likud party maintains that the issue of the security cabinet should be dealt with, but not as part of the coalition agreements.

Michael Bachner contributed to this report.