Washington  - US President Barack Obama intends to work toward Middle East peace regardless of who forms Israel's new government, the White House said Wednesday, following Tuesday's elections.

"President Obama looks forward to working with whoever makes up that next Israeli government in a search for lasting and durable peace in the region," White House spokesman Robert Gibbs said.

Elections Tuesday in Israel failed to produce a clear winner. Foreign Minister Tzipi Livni of the Kadima party and Likud's Benjamin Netanyahu both declared victory, with 99 per cent of ballot counted.

The Kadima party was clinging to a narrow lead as the largest bloc in the Knesset with 28 seats, but Netanyahu, whose hawkish party doubled its share to 27 seats, claimed he is in a better position to form a coalition because of the strong showing of other right-wing parties.

Kadima's previous coalition partner, the Labour Party, under Defence Minister Ehud Barak, finished fourth - its worst showing ever.

"We've been working over the years with governments in Israel on trying to bring about - trying to affect the peace process. And that's still going to be our goal," State Department deputy spokesman Robert Wood said.

Wood said that the United States would wait until a new government is formed before commenting on options for moving forward on the peace process, but said Washington remains hopeful that a new government will embrace a two-state solution to the conflict with the Palestinians.

"Certainly that's what we have been pursuing. And, you know, again, let's let a government be formed," Wood said. "We certainly hope that a new government will continue to pursue a path to peace. I see no reason to think that a new government ... would do something otherwise." dpa