Prime Minister-designate Tzipi Livni's Kadima Party initialed a partial agreement Monday on bringing the Labor Party into a new governing coalition, but several issues remained to be settled before a formal pact, a Labor official said.

Livni also will need to attract support from smaller parties to form a new government to replace the one headed by former Kadima leader Ehud Olmert, who resigned as prime minister under the cloud of a corruption investigation.

If Livni fails to put together a coalition in the coming weeks, early elections would have to be called, further disrupting Israel's peace negotiations with the Palestinians.

Lior Avnon, a spokeswoman for Labor, said her party's leader, Defense Minister Ehud Barak, and Livni would try to produce a final agreement at a meeting Tuesday evening. She did not give any details on the unresolved issues.

Labor would be Kadima's key partner in any coalition and a deal would make it easier for Livni to bring in the ultra-Orthodox Shas Party and reach a majority in parliament.

Kadima holds 29 seats in the 120-member Knesset, while Labor has 19. Shas has 12 and the other partner in the former coalition, the Pensioners Party, has 4. A grouping of those four would produce a 64-seat bloc.

Livni, the foreign minister in the previous government, received formal approval to try to form a new government Sept. 22, starting the clock to put together a Cabinet within 42 days. If there was no coalition at that point, elections would have to be held within 90 days.

Livni, 50, once an agent of the Mossad spy agency, has pledged to pursue peace with the Palestinians and Syria, following up negotiations started by Olmert. She would be Israel's first female prime minister in more than three decades, since Golda Meir.

The leader of the hawkish opposition Likud Party, former Prime Minister Benjamin Netanyahu, wants elections to be called, encouraged by polls that say he could beat Livni and Barak.

Olmert and Palestinian President Mahmoud Abbas pledged to try for a peace accord by January, but negotiations have yielded little apparent progress and both sides have expressed skepticism the target could be met. Israel's political turmoil adds to the doubt.

Israel has also had several rounds of indirect peace talks with Syria, resuming contacts that were broken off in 2000.