JERUSALEM — Prime Minister Benjamin Netanyahu and the chairman of the opposition Kadima Party struck a deal early Tuesday morning to form a unity government, a surprise move that staves off early elections and creates a new coalition with a huge legislative majority.

According to the three-page agreement that Mr. Netanyahu and the opposition leader, Shaul Mofaz, signed after midnight, Mr. Mofaz will become a deputy prime minister, standing in for Mr. Netanyahu when he is abroad and joining all closed sessions of the cabinet that “deal with security, diplomatic, economic and social issues.”

At a noon news conference in the Negev Hall at the Parliament building, both men looked exhausted from a night of negotiations as they stood side by side and hailed what they described as a historic agreement. “The state of Israel needs stability,” said Mr. Netanyahu, his voice slightly hoarse. The new coalition, he said, is “good for the security of Israel, good for the economy of Israel, good for the society of Israel and good for the people of Israel.”

Mr. Mofaz, a former defense minister and military chief who recently ousted Tzipi Livni as head of the centrist Kadima Party, said the new government would be able to “contend better with the challenges facing Israel,” including “a historic territorial compromise with our Palestinian neighbors.”

“There are moments in the life in the nation when it is asked to make serious decisions,” Mr. Mofaz said. “I believe the time has come to for an all-encompassing change in the state of Israel.”

While Mr. Netanyahu’s popularity is sky high and his re-election if elections were held this fall was all but assured, avoiding elections and broadening the coalition to 94 of the 120 members of Parliament significantly consolidates his power and limits the potential influence of right-wing factions, including the ultra-Orthodox. For Mr. Mofaz, whose party has been polling far short of its current 28 seats in Parliament, the deal elevates his standing and gives him time to build more support before facing the public at the ballot box, though it also raises questions of credibility since he had insisted he would not join Mr. Netanyahu.

“It’s a win-win situation for him,” Gadi Wolfsfeld, a professor of political communication at the Interdisciplinary Center in Herzilya, said of the prime minister. “The minute you have a broad coalition, it means that no one party can use the leverage of threatening to bring down your government. That’s a great advantage for any prime minister.”

The unity agreement came hours after the Israeli Parliament took the first steps toward dissolving itself ahead of elections scheduled for Sept. 4 rather than at the end of the government’s term in October 2013. With his coalition divided over how to replace a law expiring Aug. 1 that exempted many religious Jews from military service, Mr. Netanyahu had said in a speech to the convention of his right-leaning Likud Party on Sunday night that he wanted early elections to avoid the instability of a campaign atmosphere stretching over more than a year.

But even as the political establishment here was kicking into high gear in recent days, politicians had been in secret negotiations that culminated at midnight Tuesday at the prime minister’s home in Jerusalem, where he and Mr. Mofaz signed a contract, according to a Kadima spokesman. The two men then went to the Parliament building around 2:30 a.m., where they met with lawmakers from their parties, who voted to approve the deal, officials said.

“It was at the initiation of both sides,” the spokesman, Yuval Harel, said in an overnight telephone interview. “This is the best way to get influence.”

Mr. Netanyahu said at the news conference that the new coalition would focus on four things: rewriting the draft law this summer to require an “historic redistribution of the burden;” passing a budget; overhauling the electoral process by year’s end; and advancing “a responsible peace process.”

The two men offered no specifics on their plans for integrating more ultra-Orthodox men who are now exempt from the draft to study the Torah into the military or national service, nor on how elections should be changed. But Mr. Mofaz said that if electoral reform is accomplished, “that will be enough of an achievement.”

Reaction from other political factions was swift and harsh. “This is a pact of cowards and the most contemptible and preposterous zigzag in Israel’s political history,” said Shelly Yachimovich, chairwoman of the Labor Party and suddenly the likely leader of the dwindling opposition. Ms. Yachimovich vowed to “show the public that there is a political and ideological alternative,” and said the deal gave Labor “a golden opportunity to lead the people eventually, if not now then in 2013, onto a new path.”

Yair Lapid, a popular television commentator who recently formed a new centrist party, Yesh Atid, derided the agreement as a sign of “the old, detestable, ugly politics” and predicted that “this repulsive political alliance will bury all of its participants under it.”

The Iranian-born Mr. Mofaz, 63, had said he would not join Mr. Netanyahu’s coalition. “I intend to replace Netanyahu,” he told The New York Times in an interview last month after his resounding victory over Ms. Livni, something he has reiterated more recently. “I will not join his government.”

In the interview, Mr. Mofaz criticized the prime minister’s foreign policy focus, saying that a greater threat to Israel than Iran was the continuing conflict with the Palestinians. At Tuesday’s news conference, he and Mr. Netanyahu acknowledged their different views on the issue, with the prime minister saying the key is “to be very responsible and very judicious.”

Regarding the Palestinians, Mr. Mofaz has indicated that he is willing to give up significant Jewish settlements within the West Bank, something that has angered many members of the current Netanyahu coalition, including some in his Likud Party. On Tuesday, he stressed that he believes in making an interim agreement on borders and security, but it was clear that he had not yet convinced Mr. Netanyahu of this approach. “I’ll continue to discuss these ideas with the prime minister,” Mr. Mofaz said.

For his part, Mr. Netanyahu said, “The peace process is stagnant not because of us.”

“I hope now maybe they will reconsider,” he said of the Palestinian leadership, which has refused to negotiate without certain preconditions that Israel finds unacceptable. “We were ready for negotiations and we are now. We’re ready for serious, responsible talks in which both sides will have to make tough decisions.”

A spokesman for Mahmoud Abbas, the Palestinian president, called on Israel to ”use the opportunity provided by the expansion of its coalition government” to expedite a peace accord.

”This requires an immediate halt to all settlement activity throughout the Palestinian Territories,” the spokesman, Nabil Abu Rdainah, was quoted as saying by Reuters. ”The new coalition government needs to be a coalition of peace and not a coalition for war.”

The coalition deal shocked the Israeli political establishment, which had been gearing up for a four-month sprint to elections, with most analysts seeing a political victory for Mr. Netanyahu but not necessarily a huge shift in his policies.

Yossi Verter, a senior analyst for the left-leaning daily newspaper Haaretz, called the deal “an atomic bomb,” and said it was struck out of Mr. Netanyahu’s “great power” and Mr. Mofaz’s “severe weakness.” “No party can topple him,” Mr. Verter wrote of the prime minister. “The new Netanyahu government is made of one hundred tons of solid concrete.”

Arik Bender, a writer for the daily newspaper Maariv, called the developments “Shaul Mofaz’s night,” writing in an analysis piece that he “saved the ship of Kadima from sinking at the very last moment, assured himself a prominent position in the government, and secured coalition favors for his party.” He said the agreement dealt a “painful blow” to Ms. Yachimovich, and a “mortal” one to Mr. Lapid.

David Horovitz, a veteran journalist who runs the new Web site The Times of Israel, described the new coalition as a “masterstroke” for Mr. Netanyahu. “The prime minister, with Kadima at his side, is also now potentially capable of taking a more centrist position on dealings with the Palestinians and over settlements,” Mr. Horovitz wrote in a piece posted Tuesday morning. “It’s by no means clear that he wants to do so. But he has room for maneuver now if he wishes to use it. And the Americans and the rest of the international community will be well aware of the fact.”