8:10pm UK, Saturday February 28, 2009

Israel’s right-wing prime minister-designate Benjamin Netanyahu has abandoned efforts to strike a deal with centrist Tzipi Livni to form a coalition government.

Tzipi Livni with Benjamin Netanyahu before negotiations on Friday

The decision, made after negotiations on Friday ended in disagreement, increased the likelihood that Mr Netanyahu’s right-wing Likud party would turn to rightist factions opposed to territorial withdrawals in peace talks with the Palestinians.

Ms Livni, currently foreign minister, has accused Mr Netanyahu of insufficient commitment to the two-state vision – a future Palestine created in the West Bank and Gaza Strip.

Mr Netanyahu, a former leader whose popularity was boosted when Hamas took over of Gaza after Israel withdrew in 2005, wants contacts with the Palestinians to focus on economic and security issues rather than territory.

“The courtship is over. We are not scheduling any more talks with Kadima,” said Dina Libster, a Netanyahu spokeswoman, referring to Ms Livni’s party.

“If Livni wants to rethink her approach and contact us, she is welcome to.”

Elections on February 10 to choose Prime Minister Ehud Olmert‘s successor gave Kadima, under Ms Livni, the biggest number of parliament seats.

But it also created a majority bloc of rightist factions, leading President Shimon Peres to task Mr Netanyahu with forming a new government.

Saying political stability was needed to address challenges on the Palestinian front, a gathering economic crisis, and Israeli fears of Iran’s nuclear programme, Mr Netanyahu has expressed desire to lead as broad a coalition as possible.

However, Kadima has said it will not be won over.

“What Netanyahu wants is for us to provide cover for what will be a narrow right-wing government, and we won’t do that,” said a senior party official.

“We are content to lead the opposition and prove that we’re the best alternative.”