Israel’s prime minister Benjamin Netanyahu and opposition leader Benny Gantz have signed an agreement to form an emergency government after three inconclusive elections and weeks of uncompromising talks.

The deal, which was announced on Monday evening, will see Mr Netanyahu remain prime minister for 18 months before handing the reins in April 2023 to Mr Gantz, who will be deputy prime minister and defence minister in the interim.

It will be the first time since December 2018 that Israel is not run by a caretaker administration.

Monday’s agreement also sets an explicit date — July 1, 2020 — when the cabinet can discuss proposals to annex areas of the West Bank as envisaged by Donald Trump’s peace plan.

The deal comes after the two leaders’ parties produced similar numbers of seats in each of the three elections held since April 2019.

Mr Gantz’s Blue & White alliance split last month after he announced he would join a Netanyahu-led government to combat the coronavirus outbreak.

Under their agreement:

• Mr Gantz's Blue & White alliance will control the justice ministry, a key opposition demand as Mr Netanyahu faces trial on fraud and corruption charges. However, Mr Netanyahu will hold a veto over senior judicial appointments;
   
• Likud will take the finance and public security ministries as well as the Knesset speakership;
• Labour leader Amir Peretz becomes the new economy minister while fellow party member Itzik Shmuli becomes welfare minister;
   
• Mr Netanyahu’s Strictly Orthodox partners, Aryeh Deri and Yaakov Litzman, will retain their positions as Interior and Health Minister respectively from the outgoing government.

Naftali Bennett’s right-wing party Yamina was offered the education ministry, but the party has chosen to leave the government and return to opposition.

Avigdor Lieberman’s Yisrael Beiteinu is also not taking part.

The agreement comes two weeks before a 21-day period in which any Knesset member could attempt to form a government. Had no agreement emerged, a fourth election could have been called in an effort to break the deadlock.