JERUSALEM - An Israeli political official says prime minister-designate Tzipi Livni's Kadima party is nearing an agreement on a key coalition partner.

Monday's partial agreement brings Livni one step closer to taking office as prime minister.

Lior Avnon, a spokeswoman for Ehud Barak's Labour party, says the two sides have initialled a partial coalition agreement.

She says several issues still need to be settled before a final agreement, and the two party leaders are going to try to do that in a meeting Tuesday evening.

Under the emerging deal, Labour would be Kadima's key coalition partner.

Such an arrangement would make it easier for Livni to bring in the ultra orthodox Shas party and reach a majority in parliament.