Lebanese leaders are close to a deal on the formation of a national unity government as stipulated in an agreement that ended the country's political crisis, political sources said on Saturday.

They said the new government, in which Hezbollah and its allies would have a blocking minority, could be announced as early as Saturday.

Lebanon's US-backed majority coalition and the opposition, led  by the Syrian- and Iranian-backed Hezbollah, signed a Qatari-brokered deal in Doha on May 21 that pulled the country back from the brink of a new civil war.

President Michel Suleiman was elected four days later in line with the deal, but squabbling over cabinet portfolios has held up the formation of a government.

The sources from both sides said the breakthough in the government came after a series of contacts by Qatari Prime Minister Shiekh Hamad bin Jassim al-Thani with rival leaders.

The new government, led by Prime Minister Fouad Siniora, would have two Hezbollah ministers in addition to nine ministers from its Shi'ite Muslim, Druze and Christian allies.

The ruling coalition would have 16 ministers while the remaining three ministers in the 30-member cabinet would be picked by the the president, the sources said. Personalities close to Suleiman would be assigned the key defence and interior portfolios.

The main task of the cabinet would be to ease political and sectarian tensions that had led to bouts of deadly violence, adopt an election law already agreed in Doha, and supervise next year's parliamentary election.

After the formation of the government, Suleiman is expected to call rival leaders for round table talks to discuss various divisive issues. On top of the agenda would be the fate of Hezbollah's weapons.

Hezbollah maintains a formidable guerrilla army that had survived a war with Israel in 2006.

Its domestic detractors say there are no more justifications for the group to keep its arms after Israel pulled out of Lebanon while Hezbollah and its allies argue that it needs its
arsenal to defend Lebanon against 'Israeli threats'.

Hezbollah and Israel are expected to exchange prisoners later this month.-Reuters