Hawkish Netanyahu ahead in battle for Israel's helm: observers

"The chances of Livni of forming a government amount to zero," said Avraham Diskin, a political scientist with Hebrew University in Jerusalem, a sentiment echoed in much of the media.

Livni’s Kadima party narrowly won Tuesday’s election with 28 seats but the foreign minister does not have the support needed for a governing coalition of at least 61 MPs in the 120-member parliament.

Netanyahu, a former prime minister whose Likud party won 27 seats, can count on a total of 65 seats with the backing of right-wing factions which dominated the vote.

Final results are expected later on Thursday once soldier and overseas ballots are counted and could tip the scales toward Likud as troop votes usually tend to lean toward the right.

Both Livni and Netanyahu claimed victory immediately after the cliffhanger election, leaving Israel facing potentially weeks of political turmoil as they scramble for support from the smaller parties.

"She (Livni) cannot continue to pretend that the people have entrusted her with the direction of the state under the pretext that her party has one more mandate that Likud, which with its allies is the only one capable of forming a government," Diskin said.

Israel’s new kingmaker Avigdor Lieberman, whose ultra-nationalist Yisrael Beitenu party came third on Tuesday, has added a dose of suspense to the political haggling by refusing to say who he will support.

"I met with Netanyahu and I met with Livni and my position is clear. I am not excluding anyone at this moment," he told public radio.

Observers warn that if Lieberman supports Livni, she is likely to lose the backing of the other left-wing parties, Labor and Meretz.

And despite his higher chances of becoming the next Prime Minister Netanyahu is walking a political tightrope, analysts say.

He is widely believed to want a unity government including Kadima to give him a solid majority in parliament and avoid the risk of a short-term government which analysts warn would be the case with a strictly right-wing coalition.

"Bibi, whose narrow victory was anything but invigorating, was already burned once when he formed a narrow government back in 1996 and was kicked out of office bruised and humiliated (three years later)," wrote the Maariv newspaper.

"Burned once, twice shy, and today he yearns for a national unity government," it said.

A narrow right-wing government would include parties opposed to dismantling settlements and territorial concessions in peace talks and will put Netanyahu at odds with the administration of US President Barack Obama, analysts say.

"Netanyahu would very much like Kadima to join his government and he would be willing to give a lot for this to happen," wrote Maariv.

"It is fairly clear that any political move Netanyahu attempts in terms of the peace process, will result in the resignation of at least one of his coalition partners.

"Therefore, if he truly desires a stable government that will last the entire term, he needs Kadima," it said.

But Livni has insisted that as the winner of the election, she should lead a unity government.

Another solution would be a rotation in a unity government, a scenario in Israel had in 1984, when the two main parties shared the prime ministers post. Netanyahu has ruled out such an option, however.

"Netanyahu is unwilling to agree to a rotation government, because he wants to keep the entire term for himself," wrote the mass-selling Yediot Aharonot.

The press says Netanyahu is trying to tempt Kadima into a unity coalition by offering major portfolios such as the foreign and defense ministries.