The signing of a coalition agreement between the ruling Likud party and ultra-nationalist Yisrael Beytenu Wednesday gave way to gloomy predictions over the country’s future by opposition lawmakers, who warned Israel will face increased internal and international pressures as a result.

Opposition leader Isaac Herzog predicted a deterioration of the situation in the country, and his No. 2 in the Zionist Union faction, Tzipi Livni, cautioned that the boycott movement against Israel will only increase.

Speaking at an event hosted by the Israel Democracy Institute, Herzog warned of the dangers posed by a cabinet that contains the right-wing Yisrael Beytenu and Jewish Home parties.

“I regret that Netanyahu chose in the end to blink and chose to take the helm of his government with Liberman and Bennett in a dangerous and extreme direction,” he said of Yisrael Beytenu leader Avigdor Liberman and Jewish Home head Naftali Bennett. “We won’t see in a Bennett-Liberman cabinet any step that gives hope, only steps that will worsen the situation and bring us, to my regret, to another round of pain and failure. The citizens of Israel should be worried about a rightist coalition that will bring Israel to very dangerous places.”

Negotiators for the Likud and Yisrael Beytenu parties reached an agreement overnight Tuesday to bring Yisrael Beytenu into the coalition and name Liberman defense minister. He is expected to be sworn in on Monday, pending a Knesset vote.

Opposition Isaac Herzog attends an Israel Democracy Institute conference in Jerusalem on May 25, 2016. (Photo by Yonatan Sindel/FLASH90)

Opposition Isaac Herzog attends an Israel Democracy Institute conference in Jerusalem on May 25, 2016. (Photo by Yonatan Sindel/FLASH90)

Yisrael Beytenu will bolster the coalition’s 61-seat, razor-thin Knesset majority with five seats, while shrinking the opposition to 54, though Jewish Home has threatened to hold up Liberman’s appointment if demands are not met to increase intelligence sharing among ministers on security matters.

Livni warned that the new coalition will hinder the peace process and further turn the world against Israel.

“The new government subscribes to a worldview that will prevent us from advancing the peace process, that will isolate us in the world and strengthen the BDS [boycott movement],” she said. “The frustration of the right-wing government established today with its inability to fully carry out its ideology will be directed into harming democracy.”

Netanyahu has said the addition of Liberman, a hardliner who has referred to Palestinian Authority President Mahmoud Abbas as a terrorist, will not affect peace efforts, addressing fears that the move will hinder diplomatic efforts with the Palestinians.

On Monday, the New York Times editorial board called the appointment of Liberman “baffling” and said the posting “would make a mockery of any possible Israeli overtures to the Palestinians.”

Zionist Union MK Amir Peretz called the coalition agreement “an alliance between the most extreme elements of the Knesset.”

“This is a new chapter in this Knesset, perhaps even in Israeli politics,” he told Israel Radio. “We have to present an alternative that is entirely different.”

MK Tzipi Livni during a Zionist Union party meeting in the Knesset, March 28, 2016. (Yonatan Sindel/Flash90)

MK Tzipi Livni during a Zionist Union party meeting in the Knesset, March 28, 2016. (Yonatan Sindel/Flash90)

Liberman previously served as foreign minister under Netanyahu, but publicly split with him over how to manage the 2014 Gaza war and moved into the opposition after elections last year.

Meretz chief Zehava Galon, who once accused Liberman of acting as a foreign agent for Azerbaijan, charged him with underhanded dealings.

“Do you recall that this man got out of affairs for which he was interrogated only when the witnesses died mysteriously? Do you recall that every public role this man has held mysteriously led to his family getting rich?” she said, according to Channel 10.

A Yisrael Beytenu source said the coalition deal was inked Wednesday after the party’s demands were met, including a minimum increase of NIS 1.4 billion ($360 million) for pensions — a sticking point in the negotiations earlier this week — as well as another NIS 150 million toward public housing.

Along with Liberman’s appointment as defense minister, Beytenu party member MK Sofa Landver will resume the role of immigrant absorption minister, which she previously filled between 2009 and 2015.

The Yesh Atid party, who at one point joined up with Liberman to push through reforms of religion-state matters, criticized Liberman for dropping many of his stated principles in order to take a seat at the cabinet table, including education issues and the demand for all parts of society — including the ultra-Orthodox community — do national service.

“Liberman gave up on the equal burden [of national service], on the core education curricula, and on all the values that he promised to fight for, and now he has also given up on the pensions problem. Signing the agreement and the entry of Yisrael Beytenu into the coalition is not an achievement. It is an embarrassing surrender, a betrayal of the public trust, and an abandonment of the public. The pensions problem can’t be solved with a billion and half shekels. This is a slight addition that can’t really help those who need it,” read a statement released by the party.

Yesh Atid leader Yair Lapid, right, is accompanied by MK Yael German as he speaks at a press conference from the Knesset in Jerusalem on May 23, 2016 (screen capture: Facebook)

Yesh Atid leader Yair Lapid, right, is accompanied by MK Yael German at a press conference from the Knesset in Jerusalem on May 23, 2016 (screen capture: Facebook)

Druze member of Yisrael Beytenu MK Hamad Amar indicated his support of the coalition deal by posting an image to his Facebook page showing a clause from the agreement in which the coalition commits to implementing a development plan for the Druze community and other minorities.

Liberman’s presumptive move into the Defense Ministry shook the Israeli political arena when it was announced last week, as the then-incumbent defense minister Moshe Ya’alon from the Likud party was effectively ousted from his post.

Ya’alon promptly resigned from politics, citing a “lack of trust” in the prime minister.

Times of Israel staff contributed to this report.