Israel's new government has begun to take shape, with Moshe Katsav, the president, poised to ask Ehud Olmert, the acting prime minister, to form a coalition with Labour to fix the borders of Israel. After several days of sniping at each other, Olmert and Labour leader Amir Peretz announced on Tuesday they would work towards forming a coalition which will still need the support of several other smaller parties. "We are glad to announce that, after President Moshe Katsav appoints me to form a government, we will start coalition talks to create a government in which Labour will be a senior partner," Olmert told a joint press conference.