Lebanon's Hariri set to form government with Hezbollah

BEIRUT (Reuters) - Lebanon's Prime Minister-designate Saad al-Hariri will announce a new national unity government to include Iranian- and Syrian-backed Hezbollah in the next few days, politicians said on Saturday.

Lebanon has been without a functioning government since Hariri led his coalition, backed by the United States and Saudi Arabia, to victory in a June parliamentary election against Hezbollah and its allies.

Politicians from both sides said Hariri had now clinched a deal with the opposition on the new government's make-up.

A government acceptable to all main parties is seen as key to maintaining stability in a country facing sectarian and political tensions, as well as a huge debt burden.

"The government is as good as formed," member of parliament Okab Sakr, who is close to Hariri, told New TV station. "It's all about the final touches now and its formation will be completed this weekend."

Other MPs from both camps made similar remarks with some saying it could take a two or three more days.

Leaders of the opposition, including Hezbollah chief Sayyed Hassan Nasrallah, agreed to join the proposed government during a meeting on Friday night.

"Participants at the talks have agreed to forge ahead with the formation of the national unity government in accordance with the regulations that were agreed upon during the negotiations that had been conducted," Hezbollah said in a statement early on Saturday.

Hezbollah, which the United States still lists as a terrorist group, was part of the outgoing government.

A senior aide to Christian opposition leader Michel Aoun met Hariri later and relayed to him the opposition's decision and its acceptance of the portfolios offered to them by the prime minister-designate.

Hariri's spokesman Hani Hammoud described the meeting as very positive and said: "I expect the formation of the government soon."

But other sources said Hariri had not yet been given the names of Aoun's proposed ministers and expected the government to be ready by early next week at the latest.

BREAKTHROUGH DEAL

Hariri has spent more than four months trying to broker a deal with the opposition to join a unity cabinet. A warming of ties in recent weeks between the two sides' main backers, Syria and Saudi Arabia, helped to ease the rift in Beirut and led eventually to the breakthrough.

The rival factions agreed in July on the broad division of seats in the new cabinet. But Hariri, son of assassinated billionaire politician Rafik al-Hariri, had struggled to reach agreement with opposition politicians on the details.

At the heart of the dispute were the demands of Aoun, an ally of Hezbollah. Aoun's Free Patriotic Movement holds more seats in parliament than any other Christian party.

The new 30-minister cabinet is set to include 15 ministers from Hariri's coalition, 10 from the opposition including two Hezbollah ministers, and five, including the key interior and defense portfolios, will be nominated by President Michel Suleiman.

Incumbents Ziad Baroud and Elias al-Murr, loyal to the president, are set to keep their interior and defense portfolios, while new foreign and finance ministers are expected to be named.

Hariri had named Raya Hassan as finance minister, responsible for managing Lebanon's public debt burden, in an earlier proposal that was rejected by the opposition.

Parliament Speaker Nabih Berri, the main Shi'ite Muslim ally of Hezbollah, is set to name the new foreign minister who was likely to be retired university professor Ali al-Shami, the sources said.

(Writing by Nadim Ladki; Editing by Charles Dick/David Stamp)