Israel PM hands centrists ultimatum as govt crisis looms

Israeli Prime Minister Benjamin Netanyahu on Wednesday pledged to turn to the ultra-Orthodox parties to form a coalition if the centrist Yesh Atid refused to back down from its "exaggerated demands."

The Israeli leader has been holding intensive coalition talks ahead of a looming March 16 deadline to announce the shape of his new government. If he fails to piece together a working majority of at least 61 MPs, the task will be given to another party leader.

Yesh Atid leader Yair Lapid, who is widely expected to be a senior partner in the new government, has so far managed to convince Netanyahu to agree to a slimline cabinet of 20 ministers, down from 28, and to form a coalition without the ultra-Orthodox.

But Lapid's insistence on Yesh Atid, which won 19 seats, taking the prestigious education portfolio has angered Netanyahu who wants to keep it in Likud hands.

"If, in the next hours there will not be a breakthrough in the negotiations with Lapid and he doesn't back down from his exaggerated demands, the prime minister will begin swift talks with the ultra-Orthodox parties," a Likud source said.

The threat was rejected out of hand by senior sources within Lapid's party.

"The coalition crisis that we are currently witnessing is not about which portfolio is given to which party. This is a struggle for the moulding of the future image of Israeli society," one said.

"The portrayal of Yesh Atid as an extortionist party is a gross distortion of the truth," he said.

"Yair Lapid refuses to deviate from his principles and from his promises to the Israeli voter, even if that means that Yesh Atid will have to sit in the opposition."

So far, Netanyahu, whose Likud-Beitenu list won a narrow election victory of 31 seats within the 120-seat parliament, has signed only one coalition agreement with the centrist HaTnuah headed by former foreign minister Tzipi Livni, which won six.

Earlier this week, media reports suggested Netanyahu was readying to sign an agreement which would see Likud-Beitenu forming a coalition with Yesh Atid (19 seats), the far-right Jewish Home (12), HaTnuah (6) and the centrist Kadima (2), giving him a majority of 70.

Speaking to the Haaretz website, sources in Likud, Yesh Atid and Jewish Home agreed that the coming hours would prove critical in determining the composition of the next government.

Although the deadline expires on Saturday evening, the final practical deadline for signing all the coalition agreements would be sundown on Friday, ahead of the Jewish sabbath, Haaretz said.

Late on Tuesday, Netanyahu reportedly met Jewish Home leader Naftali Bennett who has so far stuck closely to Lapid, with the two agreeing that neither party would enter the coalition without the other.

After Netanyahu's ultimatum, Bennett was quick to reject the pressure.

"My friends from Likud. Forget it. It won't work like this," he wrote on Facebook. "There are differences, we must talk and compromise. All of us. Until there is a new government."

Media reports also said Netanyahu met one of the leaders of the ultra-Orthodox Shas party (11 seats), on Tuesday night.

Shas and the ultra-Orthodox United Torah Judaism, which won seven, collectively count for 18 seats.