Bid by Netanyahu's Rival Gantz to Form Israel Govt Enters Final Stage as Two-Day Deadline Approaches

Jerusalem: After weeks of talks over a new Israeli government have gone around in circles, Benjamin Netanyahu's rival Benny Gantz had just two days left Monday to form a coalition and become prime minister.

Netanyahu's right-wing Likud party and Gantz's centrist Blue and White coalition achieved near parity in September's repeat elections, but even with allied parties both fell short of the 61 seats needed to form a majority in parliament.

Netanyahu was first given 28 days to form a coalition government but failed, so President Reuven Rivlin granted Gantz a similar timeframe.

It is due to expire at 11:59 pm on Wednesday, and the former army chief has been engaged in a negotiation blitz in a bid to avoid a third general election in a year. Polls in April also led to a stalemate in a political system reliant on coalition building.

Gantz's task may have been further complicated by a flareup between Israel and Islamic Jihad in the Gaza Strip last week, as his potential premiership likely rests on Arab support in parliament.

Gantz has been desperately trying to convince Avigdor Lieberman, head of the nationalist Yisrael Beitenu party, to join his coalition. But even if he did they would fall short of a majority -- needing at least the tacit support of the Arab Joint List, which has 13 seats, to govern.

The Arab parties would be unlikely to take ministries but could support a minority Gantz government in key votes in Israel's parliament, the Knesset. But Lieberman, a right winger known for his tough rhetoric towards Gaza, has reiterated his opposition to allying with Arabs.

The former nightclub bouncer has been a defiant kingmaker, with his eight parliamentary seats potentially enough to put Netanyahu or Gantz into power.

Lieberman is pushing for a unity government of his party, Netanyahu's right-wing Likud and Gantz's centrist Blue and White and has held talks with both sides as well as with Rivlin.

But on Monday he set a deadline for his continued involvement in those negotiations.

"If by 12.00 noon (1000 GMT) Wednesday we don't have an initialled agreement, then as far as I'm concerned it's every man for himself," he said. After his comments, to Yisrael Beitenu lawmakers, Lieberman met once again with Gantz but neither side indicated any progress.

Netanyahu, facing losing office for the first time since 2009, has upped his anti-Arab rhetoric in a seeming bid to increase pressure on Lieberman. On Sunday he warned of a "dangerous government" backed by parties that "support terrorist organisations".

Gantz, Lieberman and Netanyahu all supported the Israeli assassination of an Islamic Jihad leader in Gaza that prompted last week's deadly flareup, while the Joint List opposed it. "The Arabs ... are not Zionists and do not support Israel. To be dependent on them all the time, especially at the present time, is an enormous danger to Israel," Netanyahu said.

He is due to meet Rivlin on Tuesday evening.

Gideon Rahat, a political science professor at Hebrew University in Jerusalem, said negotiations were likely to go down to the final moments. "(Gantz and Netanyahu) are playing games, trying to pressure each other," he said.

"There are a lot of rumours, and it is a game of pressure -- so I don't know what the end result will be." Israeli Arabs are the descendants of Palestinians who remained on their land when Israel was created in 1948 and constitute nearly a fifth of the country's population. They have full legal rights but complain of discrimination and incitement against them in the predominantly Jewish country.

A range of scenarios remain and are likely to be played out in frantic negotiations behind closed doors. Lieberman could ultimately backtrack and cut a deal with Netanyahu, or he could throw his weight behind Gantz and form a minority government.

"Does Gantz himself want to lead such a government? The answer is no," a columnist in Haaretz newspaper said Monday. And Lieberman, it added, "certainly doesn't want any form of partnership with (the Arabs). But does he have a better option?".

If Gantz is unable to cut a deal by Wednesday, lawmakers have 21 days to propose a candidate capable of forming a majority to the president. There is also a joker in the pack: Attorney General Avichai Mandelblit is due to decide by December whether to charge Netanyahu over corruption allegations he denies.

An indictment might permanently damage Netanyahu's support, whereas a reprieve could give him a new lease of life. If the 21 days pass without a breakthrough, a third election becomes inevitable