The agreement came less than a month after Likud maverick David Levy announced that he was forming a new party, Gesher — Hebrew for "bridge" — and that he would run for prime minister as party head.
Levy, 58, broke away from Likud in June in a dispute with longtime rival Netanyahu over internal party election procedures.
When he formed his own party Feb. 19, Levy rebuffed overtures to join a Likud-Tsomet list that brought the two opposition parties under one parliamentary banner.
Under the terms of the earlier Likud-Tsomet agreement reached Feb. 7, Tsomet leader Rafael Eitan had agreed not to run for prime minister. He was given the second position behind Netanyahu on the joint list.
When Levy formed his own party, he was viewed as potentially siphoning votes from Netanyahu by running separately on his new party's centrist platform.
Observers of the long-standing adversarial relationship between Levy and Netanyahu were treated Tuesday to the sight of the two shaking hands with each other at the Knesset, as well as with Eitan, accompanied by a brief burst of singing by others in the room.
Levy agreed to join the new three-way list after being promised the second spot behind Netanyahu, with Eitan now shifting to the third position.
Eitan agreed to make concessions on his earlier agreement with Likud in exchange for being given first priority in choosing the chairs of Knesset committees and their members in the next Knesset.
The agreement also specifies that Tsomet and Gesher candidates would have seven places each in the first 42 spots on the joint Knesset list.