Jerusalem  - Israeli Opposition Leader Benjamin Netanyahu moved closer Thursday to being asked to form Israel's next government, after a key faction holding the balance of power recommended that President Shimon Peres nominate him as premier.

The move by the Yisrael Beteinu party capped days of speculation as to which prospective candidate - Netanyahu or outgoing Foreign Minister Tzipi Livni - would get its backing.

Both Netanyahu, whose hawkish Likud party received 27 seats in the February 10 election, and Livni, whose centrist Kadima faction won 28 seats, have said they should be the one to form the next government.

Israel Radio reported that Yisrael Beteinu leader Avigdor Lieberman also recommended to Peres that the three largest parties - the Likud, Kadima and his faction - form a national unity government.

Although Lieberman's backing gave Netanyahu the support of the majority of legislators in the 120-seat Knesset, Peres was continuing Thursday his meetings with political parties, as required by law.

The president has to consult with all Knesset factions after an election, before nominating a legislator to form a new government.

The nod traditionally goes to the person who has the best chance of forming a new coalition, rather than to the legislator whose party won the most seats in the election.

With Lieberman's backing, Netanyahu now has the support of 65 legislators. Livni has the backing of only 28, after the dovish Meretz faction, and Arab-Israeli parties, refused to endorse her.

The Labour Party, which with 13 mandates in the fourth largest faction in the Knesset, has also said it will not support Livni for premier.

Peres was due to wrap up his meetings later Thursday, but it was unclear when he would announce his candidate for prime minister. (dpa)