Netanyahu to form Israel cabinet

Benjamin Netanyahu, the leader of the right-of-centre Likud party, has been asked to form Israel's next government.

Mr Netanyahu said Israel faced "great challenges" including the global economic crisis and what he said was Iran's wish to obtain nuclear weapons.

He said he would try to form a unity government with his political rivals.

But Tzipi Livni, leader of the centrist Kadima, has suggested she would rather be in opposition than join a government led by Mr Netanyahu.

Kadima narrowly defeated Likud in the election held on 10 February, but Mr Netanyahu has the support of religious and right-wing parties in the Israeli parliament.

His position was bolstered on Thursday when Avigdor Lieberman, head of Yisrael Beiteinu, which favours tightening the Israeli blockade on Gaza, said it wanted him to be prime minister.

Let's unite to secure the future of the State of Israel
Benjamin Netanyahu
Likud leader

Profile: Benjamin Netanyahu

President Shimon Peres and Mr Netanyahu held a news conference to officially announce that the Likud leader now has six weeks to put together a coalition.

He told the news conference he wanted to open talks with his political rivals to form a "broad national unity government for the good of the people and the state".

He said: "I call on Kadima chairwoman Tzipi Livni and Labour Party chairman Ehud Barak and I say to them - let's unite to secure the future of the State of Israel."

On Iran, Mr Netanyahu returned to a key campaign theme, suggesting that Tehran had emerged as Israel's greatest security threat.

The Islamic Republic was seeking to develop nuclear weapons, he said, as well as sponsoring the Hezbollah and Hamas militant groups in Lebanon and Gaza.

'Pawn'

The BBC's diplomatic correspondent, Jonathan Marcus, says the decision to choose Mr Netanyahu marks the beginning of a period of serious horse-trading.

He says Mr Netanyahu will have a real job on his hands - either to persuade Ms Livni to join his government, or to reconcile the differences among the various factions on the right.

ELECTION RESULTS
Kadima: 28 seats
Likud: 27 seats
Yisrael Beiteinu: 15
Labour: 13
Shas: 11
United Torah Judaism: 5

See results in full
Tough dealing ahead
Q&A: Israel's general election

Minutes before the news came out that the Likud leader would be asked to form a government, Ms Livni said what was being proposed was a government "without political vision, a government with no values".

"I will not be a pawn in a government that would be against our ideals," she said.

Israel's Haaretz newspaper reported on Thursday that Ms Livni said she would consider a coalition which included Likud, Kadima, and Yisrael Beiteinu.

She ruled out joining a coalition which included a number of other right-wing parties, the newspaper reported.

One of the main points of contention between the two parties is how to handle the Palestinian territories.

Ms Livni favours more talks and the creation of a separate state for the Palestinians.

Mr Netanyahu says he does not want Israel to rule the Palestinians, but says they should not be allowed things he considers a threat to Israeli security, such as an army, or control of airspace or the Jordan Valley.

Likud's 1999 charter "flatly rejects" a sovereign Palestinian state, but backs Palestinian self rule.

Palestinian officials reacted with caution to the news of Mr Netanyahu's appointment.

Saeb Erekat, a senior aide to Palestinian Authority President Mahmoud Abbas, who has been negotiating with Israel's outgoing Kadima-led coalition, said Israel needed a government committed to peace.

"We will not be in the negotiations with an Israeli government that continues settlement activities, that refuses the two-state solution, and that doesn't accept agreements signed," he said.