According to public broadcaster KAN, far-right National Security Minister Itamar Ben-Gvir had made a forceful request to join the Cabinet.
The move came after opposition leader Benny Gantz quit the emergency government earlier this month following disagreements over a post-war strategy on the Gaza Strip.
It originally included Netanyahu, Gantz, Defense Minister Yoav Gallant, Ron Dermer, Gadi Eizenkot, and Shas party leader Aryeh Deri.
Israel has faced international condemnation amid its continued brutal offensive on Gaza since an Oct. 7, 2023 attack by Hamas despite a UN Security Council resolution demanding an immediate cease-fire.
More than 37,300 Palestinians have since been killed in Gaza, most of them women and children, and more than 85,000 others injured, according to local health authorities.
Over eight months into the Israeli war, vast tracts of Gaza lay in ruins amid a crippling blockade of food, clean water and medicine.
Israel stands accused of genocide at the International Court of Justice, whose latest ruling ordered Tel Aviv to immediately halt its operation in Rafah, where over a million Palestinians had sought refuge from the war before it was invaded in early May.