Prime Minister Binyamin Netanyahu is finding it hard to gain the necessary cabinet votes he needs to pass an agreement with the Obama administration on a new settlement freeze period and renewed talks with the Palestinians.

Meanwhile, the Knesset placed a further obstacle in the path of future peace deals when it voted in favour of holding a referendum over any agreement to relinquish territory under Israeli sovereignty.

Mr Netanyahu has been concentrating most of his efforts over the past two weeks on the leaders of Shas. Two of the party's ministers sit in the cabinet and, in order for him to gain a majority, they will have to at least abstain. Last week it seemed as if the party would acquiesce to the prime minister's demand but as the Americans seemed reluctant to agree to Mr Netanyahu's requests for assurances, they began to waver.

According to the agreement reached between Mr Netanyahu an US Secretary of State Hillary Clinton two weeks ago in New York, Israel will agree to a further period of three months of building in freeze in the West Bank which will allow a resumption of direct talks with the Palestinian Authority. In return, the administration has promised to grant Israel a defence package worth $3 billion, which includes 20 advanced F-35 fighter jets, to further attempts to end Iran's nuclear programme and also to shield Israel from attempts to delegitimise it at the United Nations.

Kadima opposed on Monday the new law mandating a national referendum over any future peace deal requiring Israel to retreat from territory under Israeli sovereignty. This mainly refers to east Jerusalem and the Golan Heights, as Israel has never extended its sovereignty to the West Bank, but since these territories are expected to feature as part of any peace deal with the Palestinians or the Syrians, Netanyahu's opponents, and the Labour party which is part of the coalition, claim that the new law is simply "another obstacle to peace".