A deal to bring the hard-right Israel Beiteinu party into the Israeli government was inked Wednesday, pushing the coalition further to the right and raising questions about the future of Middle East peace talks.

"Israel needs a stable government, so that we can tackle the challenges and seize the opportunities that lie before us," said Prime Minister Benjamin Netanyahu as he promised to do everything he could to reach a peace deal with the Palestinians.

Israel Beiteinu leader Avigdor Lieberman, who will become defence minister, said he will follow sensible policies with an aim to bringing stability to Israel and the region. The party's Sofa Landwer will become migration minister.

The sitting defence minister, Moshe Yaalon, resigned on Friday, citing a lack of faith in Netanyahu.

Netanyahu's Likud party is the dominant member of the existing ruling coalition, but it has a razor-thin hold on power, with 61 of 120 seats. Adding the Israel Beiteinu party to the coalition would increase the total to 66 votes.

The government's majority would have increased to 67, but one Israel Beiteinu member opted to remain in opposition rather than join the government.

But the deal does not put Netanyahu's government into the free and clear. Another coalition partner, Naftali Bennett of the pro-settler Jewish Home party, has threatened to pull out of the government unless it gets to appoint a military attache who would keep ministers up to date on security developments.

Bennett has argued that ministers have not always been kept up to speed during crises. Netanyahu's Likud has rejected the proposal.

Israel Beiteinu has hard-right policies on a variety of topics, most particularly pronounced in its opposition to peace talks with Palestinians and support for settlers in disputed territories. It has also drawn ire for regular anti-Arab statements.

Lieberman, who served as foreign minister under Netanyahu once, exited a political alliance with him in 2014, arguing that the prime minister's response to attacks out of the Gaza Strip were not muscular enough. But, on Wednesday, he and Netanyahu said they had put aside their past differences.

Netanyahu on Wednesday also called the centre-left Zionist Union opposition party of Isaac Herzog to join his government. Herzog had announced last week that a previous attempt to bring his party into the government had failed.

The Islamist Hamas movement in the Gaza Strip said in a statement that Lieberman's cabinet posting indicates the country's increasing "radicalism and fanaticism."

Khaled al-Batsh, a leader of the Islamic Jihad armed faction in the Gaza Strip, said in a statement that "assigning Lieberman as minister of defence clearly shows the brutal and hostile policy of the occupation."

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