* Netanyahu to keep close watch on Livni's peace efforts * Questions raised whether Livni will be Netanyahu fig leaf * Israeli prime minister still short of governing majority By Jeffrey Heller JERUSALEM, Feb 20 (Reuters) - Tzipi Livni's coalition pact with right-winger Benjamin Netanyahu speaks volumes about the obstacles ahead for the moderate former Israeli foreign minister in her new task of pursuing peace with the Palestinians.

Former foreign minister Tzipi Livni will be Israel's negotiator in talks with the Palestinians in the emerging coalition government of Prime Minister Benjamin Netanyahu, a statement said on Tuesday. Livni, who heads the centrist HaTnuah party, will serve as justice minister and "negotiator with the Palestinians to reach an agreement that would end the conflict," said the statement which was issued by Netanyahu's Likud-Beitenu. HaTnuah, which campaigned for renewal of peace talks with the Palestinians, is the first party to join Netanyahu's new coalition.

* Says N. Korea test "reverberates everywhere in Middle East" * Calls again for credible military threat on Iran JERUSALEM, Feb 18 (Reuters) - Israeli Prime Minister Benjamin Netanyahu pointed on Monday to North Korea's latest nuclear test as proof the world must keep up pressure on Iran to prevent it acquiring atomic weapons.

Israeli Prime Minister Benjamin Netanyahu said on Monday that Iran was now closer to crossing the "red line" after which it would be able to build a nuclear weapon but had not yet reached that stage. "The Iranians are closer to the red line," his office quoted him as telling visiting American Jewish leaders. "They haven't crossed it yet but they are shortening the time needed to cross it." "This must be stopped," he said. "We need to apply stronger pressure and harsher sanctions."