Meretz MK Ghaida Rinawie Zoabi will end her protest against the government and return to support the coalition, she said on Sunday.
Rinawie Zoabi reached an agreement with alternate prime minister Yair Lapid to help the Arab sector. With her vote, the coalition will again stand at 60 MKs.
She said she understands that the alternative to the government would be that the next internal security minister would be Religious Zionist Party MK Itamar Ben-Gvir and that she did not want to let that happen.
"Because I want to bring achievements to meet the needs of Arab society, I will support the coalition," Rinawie Zoabi said. "But I also want this government to be true and listen to Arab society and its needs in health care, education, housing and infrastructure."
Opposition leader Benjamin Netanyahu responded to the agreement with Rinawie Zobi by saying he was not surprised.
"Bennett and Lapid will do anything to survive politically," Netanyahu said. "They are willing to pay huge sums from you taxpayers to the haters of Israel and terror supporters their government depends on."
Bennett responded to Netanyahu by accusing him of hysteria and lies.
"He knows the truth," Bennett said. "No new funding was promised to MK Rinawie Zoabi."
Rinawie Zoabi took with her to the meeting with Lapid eight Arab mayors who articulated their demands. They called for better oversight to implement allocations to the Arab sector that were made in last year's budget and will be made in the budget that will be brought to the cabinet for approval next month.
Minister in the Finance Ministry Hamed Amar participated in the meeting.
"The meeting had a good atmosphere and it was clear that maintaining the government and coalition is a key interest of the Israeli public, in general, the Arab society in particular," Regional Cooperation Minister Esawi Frej, who participated in the meeting, said afterward. "We will do anything possible to use this crisis to strengthen the government's commitment to the Arab sector ahead of the passage of the next budget."
Bennett called upon Rinawie Zoabi earlier on Sunday to act unselfishly for the good of the country.
Speaking at the start of Sunday's cabinet meeting, Bennett made reference to her threat to leave the coalition.
"I think that if MKs on the Left feel that the government is too right-wing and MKs on the Right feel that the government is too left-wing, it is apparently a sign that the government is in a good place in the middle, a government that gets good things done and sets aside ideological divides to care for our citizens," Bennett said. "This is a government of compromise. This is a good government for Israel and we will not give up on it."
Bennett said that in order to overcome Israel's challenges all its MKs must put the good of the country above the interests of their sector.
"We all must understand that no one will be 100% satisfied," Bennett said. "This is teamwork, not working for ourselves."
The Likud will decide on Monday whether to enable the passage of a bill that would provide scholarships for two thirds of their college tuition. Bennett called on Likud MKs to at least absent themselves from the vote to let it pass, but Netanyahu said he would rather pass his own party's bill that would cover all their tuition.