Israeli media reports say Prime Minister Benjamin Netanyahu has struck a surprise deal with the opposition Kadima party to form a unity government, effectively canceling an early election.

The reports said that Israel's parliament announced it would not hold a final vote on whether to break up. The decision came after hours of debate that began late Monday.

On Sunday, Mr. Netanyahu called for the dissolution of his coalition government and early parliamentary elections in September. The proposed elections were to come more than a year ahead of the next national vote scheduled for October 2013.

Mr. Netanyahu told his Likud party members Sunday he did not want a year-and-a-half of instability that harms security, the economy and society. He said a short four-month campaign would ensure political stability.

Latest opinion polls show that the popularity of Prime Minister Netanyahu remains high.

Mr. Netanyahu's right-wing ruling coalition, one of the most stable in recent times, has split over a controversial law that exempts ultra-Orthodox Jews and Arab Israelis from military or civilian service.

In addition, the country's military says it needs more funds to cope with what it says is rising antagonism in the region, following the Arab Spring. There are also fears of a conflict if Israel attacks Iran's suspected nuclear weapons facilities.

The economy remains the top priority for many Israelis. Demonstrations over the high cost of living and lack of social services rocked the Netanyahu government last year.