Benjamin Netanyahu has been thrown a lifeline after an inconclusive election threatened to end his political career as Israel’s president asked him to form a coalition government.
The decision came after President Reuven Rivlin's attempts to broker a unity government between Prime Minister Mr Netanyahu and his chief rival, Benny Gantz, failed.
Mr Netanyahu faces an uphill struggle. After a tight election, his Likud party, along with smaller allied parties, controls 55 seats, short of the required 61-seat majority in parliament.
His former ally the Yisrael Beitenu party refused to sit in a government with Mr Netanyahu's ultra-religious partners and dovish opposition parties are unlikely to back Mr Netanyahu.
He has up to six weeks to form a coalition and if he fails, Mr Gantz is likely to be given a chance.
Standing alongside Mr Rivlin, Mr Netanyahu said it was clear that neither his Likud party nor Mr Gantz's Blue and White could put together a coalition on its own, and that the only option was to band together.
"The two of us cannot form a government unless we are together," he said. "The order of the moment is a unity government, a broad national unity government that is formed quickly."
He said the country faced great security challenges, highlighted by Iran, economic challenges and the "great opportunity" of settling its borders when President Donald Trump presents an expected Middle East peace plan.
In a statement, Mr Gantz appeared to rebuff Mr Netanyahu, citing the Israeli leader's legal problems as he faces corruption allegations.
"Blue and White, led by me, does not agree to sit in a government whose leader is facing a severe indictment," he said. "This issue, among a number of other critical factors, is more important to us than any delegation of ministerial posts or rotation."
Mr Rivlin said his decision was not a solution and that both candidates were responsible for resolving the political impasse.
"The Israeli people need to know that a government can be established," he said. "It is true that everyone will have to compromise. But if a government is not formed, it is the citizens of Israel who will pay the greatest price."
Although Mr Rivlin's duties are mostly ceremonial, he is responsible for choosing the candidate he believes has the best chance of forming a coalition government.
In last week's election, neither Mr Netanyahu's Likud party nor Mr Gantz's centrist Blue and White secured the required parliamentary majority needed to form a government.
According to final official results announced on Wednesday, Blue and White finished first with 33 seats in the 120-seat parliament, just ahead of Likud's 32 seats. Even with the support of smaller allies, both parties are short of the required 61-seat majority.
A total of 55 lawmakers have recommended that Mr Netanyahu lead the next government, while 54 have lined up behind Mr Gantz. Mr Rivlin said that after exploring all options, he concluded Mr Netanyahu had the better chance of forming a government.
Mr Netanyahu now has a preliminary 28-day period to try to broker a deal but his odds of success appear to be slim.
Both sides agree a unity deal is the only way out of the deadlock, but they have disagreed over who should head it.
Mr Gantz has repeatedly said he will not sit with Likud as long as Mr Netanyahu is at the helm. Facing a likely corruption indictment in the coming months, Mr Netanyahu is desperate to remain as prime minister.
Israel's attorney general has recommended charging Mr Netanyahu with bribery, fraud and breach of trust in a series of scandals.
Mr Netanyahu, who denies any wrongdoing, is to appear at a hearing with the attorney general next week, after which a final decision on charges is expected. Legal experts say the likelihood of an indictment is high. Although Mr Netanyahu would not be required to step down if charged, he will face heavy pressure to do so.
