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Six weeks after winning the election and only a few days before the final deadline to present his cabinet to the president, Prime Minister Benjamin Netanyahu signed coalition agreements with two parties, with three other parties close to doing a deal.
For now, Labour will remain in opposition and the new Likud government will be backed by 67 Knesset members.
After laborious negotiations, agreements have been reached with two of the parties that Mr Netanyahu describes Likud's "natural partners" - Kulanu and United Torah Judaism (UTJ).
Kulanu, led by Moshe Kahlon - who will be finance minister - will largely be in charge of Israel's economy and the construction industry.
The party will also hold the housing and environment ministries and control the Israel Lands Authority and national planning commission.
Mr Kahlon refused to sign up to the new laws being pushed by the prime minister and his allies to limit the powers of the Supreme Court, however. This will make the passage of these controversial laws much more difficult.
UTJ also reached a deal whereby the party will control the Health Ministry and the Knesset Finance Committee - subject to the assurance that Mr Kahlon's planned reforms will be green-lighted.
UTJ also extracted commitments to cancel previous legislation that slashed funding for Charedi education, limited the powers of the rabbinate and set up criminal sanctions for yeshivah students who refuse to join the IDF.
Yisrael Beiteinu was also on the verge of signing a deal under which Avigdor Lieberman will remain foreign minister and his colleague, Sofa Landwer, immigration absorption minister.
The other two partners, Shas and Habayit Hayehudi, are still negotiating portfolios and policy. Naftali Bennett will be education minister but is demanding a commitment to adding a billion shekels to his budget.
Shas leader Arie Deri is still holding out for more powers for the Economics Ministry, which he is expected to lead, and is demanding the cancellation of VAT on basic food products.
These disagreements are expected to be resolved by Tuesday, the last day on which Mr Netanyahu can inform President Reuven Rivlin that he has succeeded in forming a government.
Meanwhile, despite discreet communication with Mr Netanyahu, Isaac Herzog and the Labour-led Zionist Union are not joining the government. However, a senior Labour MK said last week that he expects the party to join the coalition before long as the new government is expected to run into intense international pressure to restart peace talks.