Likud-Beytenu, Yesh Atid and Jewish Home party leaders were to meet again late Monday evening to try to finalize coalition terms, with all sides indicating that a deal was near but that relatively minor differences still had to be resolved.

While gaps still remain on the distribution of the interior and education portfolios, the sides agreed to shrink the Cabinet to 20 ministers plus the prime minister, down from 30 in the last government. The issue had been a central demand of the Yesh Atid party, which had wanted a cap of 18 ministers.

The Likud will reportedly have 10-11 ministers, including three or four from Yisrael Beytenu; Yesh Atid will have five, Jewish Home three, and Tzipi Livni’s Hatnua may be asked to go down from a promised two ministers to just one.

Leaks from the talks indicated no ministerial position for Kadima’s Shaul Mofaz, prompting speculation that Kadima may not be in the coalition. Channel 2 claimed Prime Minister Benjamin Netanyahu does not want Mofaz — with whom he partnered for 70 days late last spring in an unhappy coalition alliance — in the government, in part because of the positions Mofaz has taken in the last few weeks’ coalition negotiations.

The likely reduction in the size of the Cabinet marks a significant achievement for Yesh Atid leader Yair Lapid, who argued that a lean government would set the right example for Israel as it faces budget cuts in a challenging economic environment. But it is offset somewhat by the fact that there are reportedly set to be eight deputy ministers.

Netanyahu, Yisrael Beytenu head Avigdor Liberman, Lapid and Jewish Home chief Naftali Bennett held talks Monday afternoon but failed to resolve the final issues holding up the deal. Notably, Likud is determined to see party member and current Education Minister Gideon Sa’ar maintain his position, while Yesh Atid would like the post to go to MK Rabbi Shai Piron.

The smaller cabinet will complicate Netanyahu’s difficulties within his own Likud, where too many outgoing ministers and rising political players are competing for too few cabinet seats. Danny Danon and Tzipi Hotovely, two younger politicians who did well in the Likud party primaries, have been publicly advancing their own claims, but are seen as unlikely to make it into the cabinet. And there may simply not be enough jobs for all outgoing Likud ministers such as Silvan Shalom, Yisrael Katz, Gilad Erdan, Yuval Steinitz and Limor Livnat.

Livni’s Hatnua party, the only party to have signed up to join the coalition to date, was promised two ministries (justice for Livni and environment for Amir Peretz), but may now be asked to make do with one.

After a weekend of marathon negotiations, potential coalition partners agreed on Sunday on a general outline of “severe personal sanctions” against Haredim who fail to sign up for IDF or national service. Reportedly, those who do not enlist will not face criminal charges, but will be prohibited from leaving the country and won’t be eligible for welfare and tax benefits (including social security payments for large families), among other penalties.

In addition, religious educational institutions that encourage their students to dodge the draft, like some ultra-Orthodox yeshivas, will face a “significant” reduction in funding from the state. There have been conflicting reports on the number of annual exemptions from military service that will be offered to outstanding scholars. Yesh Atid wants a maximum of 400; reports from the negotiations have indicated that the final number may be closer to 1,500-2,000.

Netanyahu has until March 16 to form a governing coalition. If he fails, President Shimon Peres could ask another party leader to try to form a government, or call for new general elections.

Hopes have run high in the last several days for a new government to be sworn in by mid-week.

Another of the final sticking points appeared to be a disagreement between the largely secular Yesh Atid and the religious-hardline Jewish Home regarding an initiative to provide public transportation on Saturday. One more issue that was holding up a deal was said to be Bennett’s demand for the Public Diplomacy Ministry in addition to the position of industry, trade and labor minister.

Lapid, who had hoped to become foreign minister, will instead serve as finance minister. The Foreign Ministry post will be kept open for former FM Liberman, who resigned in December to fight corruption charges and hopes to clear his name and return quickly to the post.

The defense minister will likely be former IDF chief of the General Staff Moshe Ya’alon (Likud); Housing could well go to Jewish Home’s Uri Ariel, while the same party’s Eli Ben Dahan could take Religious Affairs; and Kadima leader Shaul Mofaz could become minister of welfare.

The coalition will likely comprise Netanyahu’s Likud-Beytenu (31 seats), Yesh Atid (19), Jewish Home (12), and Hatnua (6) — possibly along with Kadima (2) — for a total of 68-70. Labor (15) will lead an opposition that will also include the two ultra-Orthodox parties, Shas (11) and United Torah Judaism (7).