Tzipi Livni with Kadima's coalition partners, particularly the Shas party, which had set conditions for joining a Livni government, including an increase in child allowances to Haredi communities, and a vow not to negotiate the status of Jerusalem during peace talks with the Palestinians. Livni was able to sign a coalition agreement with the Labor party, led by former prime minister Ehud Barak, but on 26 October, informed the President that she was unable to form a government and suggested Israel go to elections. Livni cited her unwillingness to sell out her principles just to become prime minister, stating, "I was willing
Tzipi Livni by Livni's decision to leave Likud and also accepted her support for the two-state solution, although it "hurt her." Livni entered politics in 1995 when she tried unsuccessfully to win a place on Likud's list to the Knesset. She was appointed as head of the government-owned corporations authority in Netanyahu's government, and oversaw the privatization of a number of companies. While in this capacity, in 1998 she was considered a prominent candidate to become director general of the Finance Ministry. Livni would later rue the decision to privatize certain companies and natural resources. As Hatnuah chairwoman in 2013, she wrote: