Jerusalem (AFP) - Israeli coalition negotiations remained deadlocked Monday as Prime Minister Benjamin Netanyahu and a right-wing party leader engaged in a standoff that could provoke new elections only months after April 9 polls.
Netanyahu has until Wednesday night to form a coalition government, but ex-defence minister Avigdor Lieberman has prevented a deal by refusing to budge from a key demand.
Holding elections so close to one another would be unprecedented in Israel, and there have been concerns over the cost and prolonged political paralysis that would result.
Israel's parliament could take the first step toward dissolving itself as early as later Monday. Further votes would be needed to move towards elections.
On Monday, Netanyahu's Likud party called on Lieberman and his Yisrael Beitenu party to compromise and allow a coalition to be formed.
Lieberman said he had already made concessions and was not prepared to go further, adding he was ready for new elections if needed.
His party controls five seats in parliament and Netanyahu needs his support for the coalition he is seeking.
"It's a matter of principle," Lieberman told journalists, calling Netanyahu's failure to form a government a "huge, unprecedented failure."
The former defence minister is seeking a guarantee that legislation he supports aimed at having ultra-Orthodox Jews perform mandatory military service like other Jewish Israelis be approved.
The issue is a highly sensitive one in Israeli politics and the bill is opposed by ultra-Orthodox parties, who control 16 seats in parliament and are also slated to form part of Netanyahu's coalition.
Failing to reach a coalition deal by Wednesday would be a major setback for Netanyahu.
April elections left his Likud along with its right-wing and religious allies with 65 of 120 seats in parliament, putting Netanyahu in position for a fifth term and on track to become Israel's longest-serving premier later this year.
He is also facing possible indictment for fraud, breach of trust and bribery in the months ahead.
A pre-indictment hearing is expected to be held in early October, and there have been reports that Netanyahu is seeking legislation in the new parliament that could result in him being granted immunity from prosecution.
If a coalition deal is not reached by Wednesday night's deadline, Israeli President Reuven Rivlin could give Netanyahu another two weeks if he concludes the premier is the only person capable of forming a government.
Alternatively, Rivlin could ask another member of parliament to form a government.
Netanyahu is widely seen as preferring new elections rather than leaving the choice up to Rivlin since someone else could be selected.