Prime Minister Benjamin Netanyahu and the opposition National Unity party agreed to form an emergency government amid the raging war with Hamas militants in Gaza strip.
The decision was announced in a joint statement by Netanyahu and opposition leader Benny Gantz.
The small war cabinet will include just Netanyahu, Gantz and Defense Minister Yoav Gallant, the Times of Israel reported on Wednesday evening.
Israel Defense Forces' former general Gadi Eisenkot and Minister Ron Dermer will serve as observers in the war cabinet, the report added.
The government and the opposition have agreed that no legislation in Knesset or resolutions will be advanced during the war that are not related to managing the war.
Meanwhile, Gaza’s sole power station has run out of fuel, forcing it to shut down, after Israel cut off supplies.
Israel has blocked fuel shipments into the Gaza Strip as part of what the Benjamin Netanyahu government has called a “complete siege” on the territory run by the Hamas militant group.
Media reports indicated that Israeli strikes had demolished entire neighbourhoods of Gaza, with airstrikes smashing the entire city blocks to rubble in the tiny coastal enclave and leaving unknown numbers of bodies beneath mounds of debris.
Israel has vowed unprecedented retaliation after the Hamas militants stormed through the border fence on Saturday and gunned down hundreds of Israelis in their homes, on the streets and at an outdoor music festival.
More than 1,000 people have been killed by Israeli air strikes on Gaza.