This is hardly our first unity government. Prime Minister Sharon had Labour in the coalition during his first term. There was also a power sharing arrangement between Labour and Likud with Yitzhak Shamir and Shimon Peres alternating as Prime Minister after an indecisive election.
I think a unity government is a good idea when majour decisions that will decide Israel's future as a nation are taken. Disengagement and a revival of the peace process are clearly such issues. Labour's presence will push the process along and Likud's leadership will prevent the left wing of Labour from giving away too much.