Israel’s long-standing prime minister Benjamin Netanyahu has said he cannot form a government, handing the opportunity to his political rival.
Mr Netanyahu has been in power for the past decade but was unable to secure a majority after September’s elections failed to produce a clear winner.
His rival Benny Gantz of the Blue and White party is now likely to be invited to attempt to form a government.
Mr Netanyahu’s attempts to bring Mr Gantz’s party into government failed.
Announcing the decision to abandon his efforts, Mr Netanyahu said he had tried repeatedly to form a coalition government but had been rebuffed.
Israel’s president, Reuven Rivlin, said he would give Mr Gantz weeks to carry out the same negotiations. Israeli Arab lawmakers pledged their backing, but Mr Gantz remained more than a dozen of seats short of a governing majority.
President Rivlin said he would try to avoid calling another election in a country which had already voted in two this year.
September’s poll saw Mr Netanyahu’s Likud party win 31 seats and Mr Gantz’s Blue and White party 33. President Rivlin initially selected Mr Netanyahu, the incumbent, as the candidate with the best chance of successfully forming a coalition.