Tzipi Livni
Tzipi LivniIsrael News Photo: (Flash 90)

Likud Chairman Binyamin Netanyahu said Wednesday during a meeting of the party's Knesset faction that the possibility of a rotation agreement between him and Kadima leader Tzipi Livni in the role of Prime Minister is not an option.

A similar agreement was implemented once in Israel's past, between Labor's Shimon Peres and Likud's Yitzchak Shamir, in 1984. The parties received 44 and 41 Knesset seats, respectively. Peres served two years as Prime Minister and then vacated his seat to Shamir, who served until 1988.

Netanyahu said that Kadima could join his government as a partner, and hinted that he would be generous as far as ministerial portfolios are concerned, but ruled out allowing Livni into the Prime Minister's Office.

Earlier Wednesday, Netanyahu held meetings with Shas party leader Eli Yishai and Yisrael Beiteinu's Avigdor Lieberman.

Most analysts estimate that President Shimon Peres would entrust Netanyahu with the assignment of forming a government.

U.S. will work with whoever leads

The U.S. State Department is looking forward to working with whatever new government is formed in Israel, State Department spokesman Robert Wood told reporters on Wednesday.

Wood told reporters in Washington that the Obama administration will not speculate on what kind of government will be formed. Wood called Israel a thriving democracy and said the administration intends to pursue a "robust agenda" once the new Israeli leadership is established.

"The government needs to be formed. We will hold discussions with the government once it's in place. The important thing is we're looking forward to working with whoever heads it. It's up to the Israeli people, not the Israeli government, who will be in it," he said.

Referring to the possible inclusion of Yisrael Beiteinu in the future coalition, Wood said "It's not for the U.S. to make this kind of characterization, it's the choice the Israeli people made. We have a robust agenda with Israeli government, we've worked during the years with different governments, and we are certainly pursuing the two-state solution, but we don't want to run ahead."