A day after Kadima and Labor signed a coalition agreement, Shas is hardening its line for its own negotiations.

"The Labor-Kadima agreement distances Shas from entering the government," a senior Shas official said.

The official also said that the senior status accorded Barak, and Labor's veto right for agenda issues, were a cynical attempt by the party to push through its worldview.

Kadima and Labor signed a deal late Monday night, after 17 hours of negotiations.

"The option of a narrow government without Shas doesn't scare me," Shas chairman Eli Yishai told Haaretz Tuesday.

A narrow coalition would face a dilemma: It would have to face a strong opposition, including Shas, Likud and Yisrael Beiteinu, or go to elections.

Associates of prime minister-elect Tzipi Livni said Tuesday that she had a good shot at bringing Shas into the coalition. They also said she was going to try to persuade Likud's Benjamin Netanyahu to change his mind and join.

However, Netanyahu continued looking for ways to torpedo the new coalition, meeting with Shas spiritual leader Rabbi Ovadia Yosef on the eve of Sukkot.

Livni on Tuesday spoke with Yishai, who is industry, trade and employment minister, and the two agreed to meet in the coming days.

Meanwhile, Shas and Kadima negotiating teams will continue to meet.

If talks move ahead with Shas, Livni is likely to ask President Shimon Peres for an extension on the alloted time to form a government.

Kadima's team is also meeting with United Torah Judaism, which wants both increased child allowances and the Finance Committee chairmanship.

Shas is demanding another NIS 1.5 billion for child allowances, an issue the religious Sephardi party says is a deal-breaker. As opposed to Labor, which agreed to receive immediately only NIS 150 million of the NIS 950 million pledged to it, and to spread funding for seniors over three years, Shas said it wanted "the lion's share" of its "family grants" in 2009. "We will have to pay, but not that much. Solutions can be found," Livni responded.