Likud and the Jewish Home continued to arm-wrestle Thursday as Likud threatened to opt for Labor as partner if negotiations with its “natural” partners fall through.

A Likud source told Arutz Sheva Thursday that Prime Minister Binyamin Netanyahu prefers a right-wing government over a “unity government” with the Left.

The implied threat, however, is that if Jewish Home continues to insist on receiving the Foreign Ministry in the new government, Likud will, indeed, turn to Labor.

The source, who is in the loop as far as negotiations are concerned, said that Netanyahu “insists” on establishing a nationalist government, as opposed to a unity coalition with the Left under MKs Yitzhak Herzog and Tzipi Livni.

“And yet,” the source added, “Netanyahu hopes that Kahlon and Bennett will become flexible in their demands and pave the way to establishment of the next government.”

Moshe Kahlon, who heads the Kulanu party, demands the Finance Ministry and political analysts expect him to receive the Israel Lands Authority and the Planning Directorate, currently under the Ministry of Interior, as well as the Ministry of Environmental Protection.

A source in the Jewish Home, meanwhile, said that party chairman Naftali Bennett intends to insist on receiving one of the three top portfolios – defense, foreign affairs or the Finance Ministry. “If he does not receive the Foreign Ministry, the party will have to sit in the Opposition. We will not join the Coalition at any price. Netanyahu and his friends at Likud need to understand that the days in which the religious sector is trampled by its nationalist partners are over.”

Meanwhile, Netanyahu met Thursday morning at his home in Jerusalem’s Balfour Street with Shas leader Aryeh Deri and the two men are expected to finalize their agreements immediately after the Pesach holiday ends – that is, early next week.

Shas is expected to receive the Interior Ministry and the position of Deputy Finance Minister. Shas and the Jewish Home are at loggerheads over the Religions Ministry, which the Jewish Home ran in the outgoing government and refuses to see going back to Shas’s control. Netanyahu may opt to place the ministry in Likud’s hands.