Before the elections, Acting Prime Minister Ehud Olmert spoke about setting Israel's permanent borders by 2010.
Meanwhile, a senior Kadima official said Labor and Shas are on their way to the government.
"There are no large gaps with Labor and Shas," the official said. "As to the Likud, they agree to everything aside from the diplomatic plan."
"It turns out the Likud is led by a radical line that says no to any diplomatic plan," the source said. "Labor presented a series of socioeconomic demands and were asked to show us later the budgetary sources for their demands."
As to problems regarding the formulation of basic government principles in a way that satisfies both Labor and Shas, the official said: "We're talking about the art of drafting – to smooth over disagreements."
'Gaps are very large'
Likud and Kadima members met Sunday to discuss joining forces in a future coalition, but following the session Likud MK Limor Livnat sounded pessimistic.
"The gaps are very large, it's highly doubtful we'll be joining. The likelihood right now seems very very slim," she said.
During the session, the Kadima team made it clear no national referendum would be held before the convergence is carried out. According to Likud sources, Kadima members said international support for the convergence is for the implementation of the move, and not necessarily for setting Israel's borders.
"Kadima is facing a complicated problem regarding the makeup of the coalition, particularly on socioeconomic matters," Livnat said upon leaving the meeting. "The coalition demands will reach a sum of more than NIS 10 billion (about USD 2.2 billion.)
Meanwhile, Likud MK Gideon Sa'ar said a "good, honest atmosphere prevailed" in the meeting. On some issues the two sides agreed, but the gaps became larger on the diplomatic front, he said.
Livnat added: "The timetables on the diplomatic front are very short. Olmert's intention is to initiate a very quick move and use the coalition majority in the Knesset in order to approve his plan."