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Prime Minister-designate Benjamin Netanyahu failed to persuade his centrist rival, Kadima party leader Tzipi Livni, to join him in a broad coalition Friday, increasing the likelihood that the next government will be a narrow alliance of right-wing and hard-line religious parties opposed to substantial concessions for peace.

Netanyahu on Friday said that he offered Livni full partnership in the government and two of three top ministerial posts, but that Livni had refused his offer for unity.

"It is clear that unity requires compromise," said Netanyahu after his coalition talks with Livni ended without agreement on Friday. "I was prepared to go a very long way toward achieving unity."

Netanyahu said he offered Livni full partnership in formulating the fundamental guidelines and direction of the new government, full equality in the distribution of ministerial portfolios between Likud and Kadima and two of the three top cabinet posts.

Netanyahu also said he told Livni he plans to advance the peace process with the Palestinians, to institute reform in the government and also to try and resolve matters of civil marriage and conversion.

Livni, however, said following the meeting that the points of contention between the two were still too large to enable her Kadima party to join a broad government under Netanyahu's leadership.

"The meeting ended without agreement on issues that I believe to be fundamental for joining this government," she said.

Sources in the parties have said neither side believes a unity government of Likud and Kadima is likely.

Nonetheless, Netanyahu wanted to show that he tried every option to compromise with Livni with generous, unprecedented offers, so that Livni appears at fault for any failure to create a unity government.

Likud negotiators, meanwhile, continue to meet with potential ultra-Orthodox and right-wing coalition partners and have received lists of demands from several parties.

"Today we will find out if Livni is a unity refusenik," a Likud source said ahead of Friday's meeting between the two party leaders.

Now that this meeting has ended without results, Netanyahu is expected accelerate coalition talks on Sunday with right-wing and ultra-Orthodox parties, aimed at presenting a narrow right-wing government within three weeks.

Livni associates said prior to the Friday meeting that they did not believe unity talks are likely. They said Livni has only become more convinced that it is better to go into opposition than to give up on the promises she made to voters. This is particularly true as she sees Netanyahu making deals with 65 right-wing lawmakers.

Livni was expected, as she did in a meeting Sunday, to demand that Netanyahu announce his support for a two-state solution and for an outline for Israeli-Palestinian negotiations reached at the 2007 Annapolis Conference.

Netanyahu and his associates had hoped in recent days that Kadima cabinet ministers like Shaul Mofaz, Dalia Itzik and Ze'ev Boim, who support a national unity government with Likud, would foment mutiny in the party. But there have been no overt moves against Livni and she enjoys at least the appearance of party unity.

Mofaz is holding meetings with ministers and Knesset members and discussing what he considers the mistake of sitting in opposition without seriously examining Likud's proposals. "The differences can be bridged. Negotiation teams should be formed," he said in a meeting.

However, Livni associates say that "the whole party is behind her. Talk here and there means nothing." Party surveys indicate that most Kadima voters are opposed to national unity.

Meanwhile, in the ultra-Orthodox camp, Shas and United Torah Judaism tried to form a "Haredi bloc," but with the start of coalition talks this week the two parties began battling each other. In talks with Likud negotiators this week, both parties demanded the housing portfolio, which the ultra-Orthodox parties seek due to their constituency's housing shortage.

Both parties' rabbinical leaderships ordered their lawmakers this week to put housing at the top of the agenda and demand cabinet decisions on perks for homebuyers and the establishment of an ultra-Orthodox city. Shas has demanded and expanded housing portfolio that would include the Israel Lands Authority.

UTJ chairman Yaakov Litzman told Haaretz after meeting Likud representatives that "there are serious problems" in the coalition talks. He mentioned competition from Shas for the Housing Ministry.

Likud negotiator Gideon Sa'ar Thursday told Habayit Hayehudi representatives that "the chokehold created by the outgoing government on the Jewish settlement of Judea and Samaria must be released and construction there thawed."

Habayit Hayehudi has also demanded that Israel not withdraw from the Golan Heights in any peace agreement and that no Palestinian state be established. The party also seeks increased Judaism studies in public schools and a promise that no changes be made to the state-religion status quo without the agreement of all coalition partners. The party demanded the education portfolio and a deputy minister in either the interior, social affairs or finance ministries.

Likud representatives also met with members of National Union; its chairman Ya'akov Katz said there was a positive atmosphere in the meeting. He said that in just a few weeks there will be a government that is "more Israeli, more Jewish, more Zionist and different in its directives than the present government."

National Union wants illegal West Bank outposts declared legal and permission for construction in the territories. The party is also opposed to a withdrawal from the Golan Heights or a Palestinian state.