Jerusalem: Israeli President Moshe Katsav will announce on Thursday he has asked interim Prime Minister Ehud Olmert to form a government after his Kadima party won elections last week, the presidential office said in a statement.
The statement said Katsav would meet Olmert on Thursday.
Once endorsed by Katsav, Olmert would have 42 days to form a government.
The centrist Kadima won the most seats in the March 28 elections, but less than expected, on plans to impose Israel's final borders with or without Palestinian agreement. It secured 29 seats in the 120-member parliament. The centre-left Labour Party came second with 19.
Olmert has said Kadima expected the Labour Party, led by former trade union leader Amir Peretz, to be its senior partner in a coalition.
Meanwhile, Olmert looked set to invite into his ruling coalition the ultra-nationalist Yisrael Beitenu party, which advocates the forced deportation of Arab Israelis.
Kadima MP and outgoing infrastructure minister Ronni Bar-On told public radio that Yisrael Beitenu (Israel Our Home), led by Avigdor Lieberman, who is branded a racist and fascist by foes, could have a place in the next cabinet.
"It's a Jewish party, Zionist and serious. There is no reason to exclude it if it accepts the main policies of the future government," Bar-On said.
With Lieberman, whose party won 11 seats, the new government could command a coalition large enough "not to be dependent on the goodwill of such and such a party," Bar-On added.
Labour, which on Tuesday agreed to form a coalition with Kadima after days of bickering, lifted its veto on the principle of sharing power with Yisrael Beitenu, which is hugely popular with immigrants from the former Soviet Union.
"If Avigdor Lieberman accepts the government's programme, if it changes position and stops talking about transfer (of Arab Israelis), it will no longer be the same Lieberman," said Labour MP Danny Yatom.
"In this case, we can sit down and talk," he added.
