Lebanon agrees national unity government

BEIRUT (Reuters) - Lebanese leaders agreed on a unity government on Friday that gave Hezbollah and its allies a blocking minority as agreed under a deal that ended a paralyzing political conflict in the country.

Political sources from both sides said Prime Minister-designate Fouad Siniora will announce the new cabinet after meeting President Michel Suleiman later in the day. The formation will end weeks of wrangling over portfolios between the U.S.-backed majority coalition and Hezbollah and its allies.

"As far as I'm concerned all hurdles have been removed and the government should be formed within hours," majority leader Saad al-Hariri told reporters later.

The opposition was guaranteed 11 of the cabinet's 30 seats under the May 21 Qatari-mediated deal that ended a conflict which had triggered the worst fighting since the 1975-90 civil war. All major decisions require a two-thirds majority or 20 votes in the cabinet.

President Michel Suleiman was elected on May 25 in line with the deal, but squabbling over cabinet portfolios had held up the formation of a government.

The new government would have one Hezbollah minister in addition to 10 ministers from its Shi'ite Muslim, Druze and Christian allies, the sources said.

The ruling coalition would have 16 ministers while the remaining three ministers would be picked by the president, the sources said. People close to Suleiman would be assigned the key defense and interior portfolios.

The main task of the cabinet would be to ease political and sectarian tensions that had led to bouts of deadly violence, adopt an election law already agreed in Doha, and supervise next year's parliamentary election.

After the formation of the government, Suleiman is expected to call rival leaders for round table talks to discuss various divisive issues. At the top of the agenda would be the fate of Hezbollah's weapons.

Hezbollah maintains a formidable guerrilla army that had survived a war with Israel in 2006.

Its domestic detractors say there is no more justification for the group to keep its arms after Israel pulled out of Lebanon while Hezbollah and its allies argue that it needs its arsenal to defend Lebanon against "Israeli threats".

Hezbollah and Israel are expected to exchange prisoners later this month.

(Writing by Nadim Ladki; editing by Philippa Fletcher)