Israeli Prime Minister Benjamin Netanyahu's new rightwing religious "government of war" is a blow to an already stagnating peace process, Palestinians said Thursday, vowing to fight it on the international stage.

The Palestine Liberation Organization blasted Israel's "extremist" cabinet, after Netanyahu announced a coalition government that gave him a slim parliamentary majority and included ministers who oppose the internationally-sanctioned two-state solution.

Israel has approved construction of 900 settler homes in annexed east Jerusalem, a watchdog said Thursday shortly after Prime Minister Benjamin Netanyahu formed a new rightwing religious coalition.

The new homes will be built in the east Jerusalem settlement neighborhood of Ramat Shlomo following a decision late Wednesday by the city's district planning committee, Peace Now spokeswoman Hagit Ofran told AFP.

The return of ultra-Orthodox parties to government as part of Israeli Prime Minister Benjamin Netanyahu's new coalition will lead to a rollback in religious reforms and boost internal tensions, experts say.

Ultra-Orthodox Jews, who make up about 10 percent of Israel's population of 8.3 million, have long enjoyed influence beyond their numbers.

After reaching a late-night deal on a new coalition, Israel's Benjamin Netanyahu signed an agreement Thursday giving a senior role to the far-right Jewish Home that firmly opposes a Palestinian state.

Following six weeks of intensive negotiations, the Israeli premier finally managed to forge a government late on Wednesday, just an hour before a legal deadline. Had he failed, he would have forfeited his position as premier.

Israeli Prime Minister Benjamin Netanyahu said he had succeeded in forming a new government, after reaching an 11th-hour coalition deal late on Wednesday with the far-right Jewish Home party.

"I am leaving here to call the president and the speaker of the parliament to inform them that I have been able to build a government," he said in remarks at the Knesset after marathon talks with Jewish Home leader Naftali Bennett.

An Israeli court on Wednesday sentenced an east Jerusalem Palestinian to 30 years in prison for 10 counts of attempted murder, court documents showed.

Aziz Oweissat, 50, was found guilty of attempts including an ax attack on a 73-year-old ultra-Orthodox Jewish man near Jerusalem's Old City and the detaching of gas pipes at several homes in the city with the aim of blowing up their Israeli occupants.

Progressive Socialist Party chief MP Walid Jumblat recounted on Wednesday how the regime of Syrian President Bashar Assad used its allies in Lebanon to limit the powers of ex-Prime Minister Rafik Hariri and his supporters.

“Hariri was working on expanding the opposition on the unconstitutional extension” of pro-Syrian President Emile Lahoud's term in 2004, Jumblat told the Special Tribunal for Lebanon on the third day of his testimony.

The Jewish pilgrimage to Ghriba synagogue on the Tunisian island of Djerba is to take place Wednesday under extra security after the Bardo museum massacre and Israel's warning of terror threats.

Hundreds are expected to take part, unlike the thousands who flocked to Africa's oldest synagogue for the annual pilgrimage in the years before a 2002 suicide bombing claimed by Al-Qaeda that cost 21 lives.

Israeli authorities have closed an investigation into a policeman who shot dead a young Arab Israeli during an arrest operation in November, the justice ministry said on Monday.

"The department for investigating the police has decided, according to the opinion of the state attorney, to close the case of the shooting by a riot policeman which caused the death of Kheir Hamdan," it said in a statement.

Israeli coalition talks took on heightened urgency on Tuesday, with Prime Minister Benjamin Netanyahu still short of even the slimmest majority 36 hours from the deadline to form a government.

Netanyahu's right-wing Likud party won 30 seats in the March 17 general election and has so far signed coalition agreements with two ultra-Orthodox Jewish parties and the center-right Kulanu led by Likud defector Moshe Kahlon.