Israel rivals agree to more talks

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Likud leader Benjamin Netanyahu has invited Tzipi Livni, leader of rival party Kadima, to hold further talks on forming Israel's next government.

Mr Netanyahu met Ms Livni on Sunday in their first meeting since 10 February's inconclusive general election.

The Israeli foreign minister said she saw no reason not to meet again.

Kadima narrowly defeated Likud in the election, but Mr Netanyahu has the support of religious and right-wing parties in Israel's parliament.

'Challenge of the hour'

Israel's President Shimon Peres on Friday asked Mr Netanyahu to form a government.

This evening did not progress us on the core issues in a way that we can talk about a joint path Kadima leader Tzipi Livni

The Likud leader and Ms Livni met in Tel Aviv for more than two hours on Sunday before appearing in front of reporters.

Ms Livni said: "We didn't reach any agreement. There are deep disagreements on this issue.

"This evening did not progress us on the core issues in a way that we can talk about a joint path."

Mr Netanyahu called the stalemate "the challenge of the hour and the will of the Israeli people" for the country's two biggest parties jointly to rule the country.

Kadima won 28 seats to Likud's 27 in the election for Israel's 120-member parliament, which is chosen through proportional representation.

Mr Peres (R) invited Mr Netanyahu to form a government on Friday

Mr Netnayahu's position was bolstered on Thursday when Avigdor Lieberman, head of Yisrael Beiteinu, which favours tightening the Israeli blockade on Gaza, said it wanted him to be prime minister.

Mr Netanyahu is expected to offer Kadima a portfolio of leading roles, including letting Ms Livni retain her role as foreign minister.

Ms Livni has been in negotiations with Palestinian groups since 2007, but the peace talks have not ended violence.

Hamas, which rules Gaza, launched rockets into Israeli territory in January, which prompted Israeli retaliation.

One of the main points of contention between the two parties is how to handle the Palestinian territories.

Ms Livni favours more talks and the creation of a separate state for the Palestinians.

Mr Netanyahu says he does not want Israel to rule the Palestinians, but says they should not be allowed things he considers a threat to Israeli security, such as an army, or control of airspace or the Jordan Valley.