March 20 (Bloomberg) -- Israeli Defense Minister Ehud Barak is pushing his Labor Party to join a coalition led by Likud leader Benjamin Netanyahu in a move that may make the new government more palatable to world leaders.

Netanyahu, who wanted to introduce his government by today’s deadline, will ask President Shimon Peres for a two-week extension until April 3 so he can continue negotiations with Labor and other parties, his spokesman Yossi Levy said in a text message.

A Netanyahu-led government “will continue the diplomatic process on all its tracks” if Labor joins, Barak said yesterday in an interview with Channel 10 television. The government should push a “plan for a comprehensive regional settlement.”

The Likud leader, who was tapped by Peres after Israel’s Feb. 10 election to form a government, said he would seek the broadest coalition possible and appealed to both Barak, Labor’s chairman, and Foreign Minister Tzipi Livni of the Kadima Party to join him.

Labor supports a two-state solution to the Israeli- Palestinian conflict while Netanyahu has expressed skepticism about efforts to establish a Palestinian state. Other potential partners are strongly opposed to talks with the Palestinians and have elevated international concern that Middle East peace efforts could grind to a halt.

Coalition Talks

Netanyahu, 59, needs to assemble a coalition that controls at least 61 seats in the 120-member Knesset to become prime minister. Although Kadima won 28 seats in parliament to 27 for Likud in the elections, Peres judged that Netanyahu had a better chance of forming a coalition than Livni. Labor won 13 seats.

Livni, 50, turned down Netanyahu’s initial overtures because he refused to declare support for the two-state solution supported by the U.S. and European Union.

Barak, 67, didn’t make the same demand of Netanyahu and contends that Labor has a responsibility to help broaden the coalition government because of the “security, political, financial and social challenges the country faces,” according to a statement e-mailed from his office. Both Barak and Netanyahu are former prime ministers.

Barak’s prodding led to a meeting yesterday between Netanyahu and Labor’s Secretary-General Eitan Cabel, who maintained his opposition to the partnership with Likud. The party will vote March 24 whether to start negotiations on a coalition.

Foreign Minister

Yisrael Beitenu, which came in third in the election with 15 seats, has agreed to join Netanyahu’s government, enabling its leader Avigdor Lieberman to become foreign minister.

Lieberman, an immigrant from the Soviet Union, campaigned on a platform of instituting a loyalty oath as a condition for citizenship. Arab lawmakers called him a racist because such a move would disenfranchise their constituents who oppose Israel being chiefly a Jewish state.

The Shas, United Torah Judaism and Jewish Home parties, all made up of Orthodox and ultra-Orthodox Jews, are still weighing Netanyahu’s offer to enter the coalition.

“Netanyahu has a government he isn’t at all happy with,” Dan Schueftan, deputy director of the National Security Studies Center at Haifa University, said in a phone interview. A narrow government that won’t carry on the diplomatic process with the Palestinians “looks bad in the eyes of the world.”

Not Convinced

Barak will have to persuade Labor’s members that the party won’t be hurt by joining forces with Likud. Cabel wasn’t convinced in his meeting with Netanyahu.

“Despite a very interesting discussion, I told him I wasn’t convinced by his words,” Cabel said in a statement sent to reporters. “Labor must go into the opposition to strengthen itself.”

Netanyahu says Barak can remain defense minister in the new government and -- in an indication of how much he wants Labor aboard -- offered the party four other ministries, according to the Haaretz newspaper. Labor would also get to appoint a deputy defense minister and chair a parliamentary committee, it said.

Netanyahu’s efforts to create a broad government may stem from his experience as prime minister when his government collapsed in 1998 because of compromises he made in negotiations with the Palestinians. If he is reliant on parties that strongly oppose concessions to the Palestinians and back settlement expansion in the West Bank, he may be forced to take steps that put him on a collision course with U.S. and European leaders.

“The broader the government, the less pressure there will be on him in the area of settlements,” David Makovsky, head of the Middle East Project at the Washington Institute for Near East Policy, said in a phone interview.

“While he has a narrow government, any tiny faction could hold him by the throat in terms of pressing their demands,” Makovsky said.

To contact the reporter on this story: Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net

Last Updated: March 19, 2009 20:10 EDT