Abstract: From the theory of many-electron states in atoms, we know that there exists a strong Coulomb repulsion, which results in the electronic term structure of atoms and is responsible for Hunds rules. By expanding the Coulomb on-site repulsion into a multipolar series, we derive this interaction and show that it is also present in solids as a correlation effect, which means that the interaction requires a multideterminant version of the Hartree-Fock method. Of particular interest is the case where this interaction couples states of localized ( f) and delocalized ( s) electrons. We show that the interaction is bilinear in the creation/annihilation operators for localized electrons and bilinear in the operators for conduction electrons. To study the coupling, we consider a simple model in the framework of an effective limited configuration interaction method with one localized f-electron and one itinerant s-electron per crystal site. The on-site multipole interaction between the f- and s-electrons is explicitly taken into account. It is shown that depending on the low-lying excitation spectrum imposed by the crystal electric field, the model can lead not only to ferromagnetism but also to a nonmagnetic state. The model is relevant for solids with localized and itinerant electron states.