JERUSALEM (AP) — Israel's designated prime minister Benjamin Netanyahu announced on Thursday a coalition deal that will give a hardline, pro-settler party control over a number of key government ministries and a senior role in overseeing the construction of Jewish settlements in the occupied West Bank.

The agreement with the Religious Zionism party marked an important breakthrough for Netanyahu as he tries to cobble together a government following Nov. 1 elections. But it also could set the stage for conflict with key allies, first and foremost the United States.

Netanyahu's Likud Party said that Religious Zionism would share control over the Finance Ministry, run the government ministry in charge of immigration and head a new ministry of “national missions.” It said a party member would also hold a special ministerial level post in the Defense Ministry in charge of settlement construction in the occupied West Bank, in coordination with Netanyahu.

“This is a significant additional step that nears us toward the formation of a right-wing, nationalist government,” Netanyahu said.

Bezalel Smotrich, chairman of the Religious Zionism party, called the deal a “historic step” that will “develop the settlement enterprise.”

Smotrich is a leader of the West Bank settlement movement and is seeking a massive increase in construction of Jewish housing in occupied territories claimed by the Palestinians for their future state. The international community, including the U.S., overwhelmingly considers settlement construction illegal or illegitimate.

Netanyahu and his hardline allies captured a majority of seats in Nov. 1 parliamentary elections, putting him in a position to form a new government.

He has reached deals with two other hardline partners giving them control over Israel's national police force and placing a politician known for his anti-LGBTQ views and disparaging remarks about non-Orthodox Jews in charge of “Jewish identity.”