Hard-line Netanyahu will form Israeli government

Israeli president Shimon Peres chose hard-line Likud leader Benjamin Netanyahu to form a government today, ending days of speculation.

Mr Netanyahu has the option of forming a narrow coalition with his Right- wing allies or a broad one with his centrist rival, Kadima Party leader Tzipi Livni.

Mr Peres made his announcement early this afternoon after meeting Mr Netanyahu and Mrs Livni to decide which should lead a coalition government after Israel's election last week.

His choice of Mr Netanyahu was cemented when Avigdor Lieberman, who heads the hawkish Yisrael Beiteinu party, endorsed the Likud leader.

Bringing his rival into a broad coalition could help Mr Netanyahu avoid a clash with the US, but Mrs Livni said she would not join a hard-line government.

"I will not be able to serve as a cover for a lack of direction. I want to lead Israel in a way I believe in," she said.