Tel Aviv  - A minister of the Kadima party of Foreign Minister Tzipi Livni, the narrow winner of Israel's elections, on Wednesday said he supported forming a grand coalition with the hardline Likud party in view of the close result.

Interior Minister Meir Sheetrit told Israeli radio early Wednesday that such a government should be led by Livni. A rotation of the premiership between Livni and Likud leader former premier Benjamin Netanyahu, as in 1984 after a similar election outcome, was not practicable, he said.

Livni emerged only with a one-seat advantage out of the close race for the 120 seats in the Knesset. However, opposition leader Netanyu could be able to form a right-wing government with a six-party coalition, which would have 65 seats.

With 99 per cent of the vote counted Wednesday morning, Kadima had a predicted 28 mandates, with the Likud close behind with a projected 27.

The ultra-nationalist Israel Beiteinu party of Soviet-born Avigdor Lieberman emerged as the third-strongest power with 15 projected seats, with the Labour Party of Defence Minister Ehud Barak forecast to slip into fourth place for the first time in Israeli history with only 13 mandates.

Under Israeli law, President Shimon Peres has first to consult with all parties elected to the Knesset as to their choice for prime minister, before entrusting the task to the candidate which the discussions have shown has the best chance of forming a government.

Both Livni and Netanyahu announced they would be the next premier. Peres is expected to task one of the two with forming a government after the official results are announced.

Official results will be announced after the votes from Israeli soldiers, diplomats abroad and sailors are counted (dpa)