Israeli President Moshe Katsav will on Thursday ask Acting Prime Minister Ehud Olmert to form a new coalition government, a statement issued the president's office said on Wednesday.

Katsav would meet Olmert on Thursday to announce the decision, said the statement.

Katsav gave a strong indication Tuesday that he will ask Olmert, who heads the Kadima party, winner of the March 28 elections, to form the next government, saying that the Kadima leader is the only real choice.

Speaking to reporters in Jerusalem, Katsav said that after Labor party Chairman Amir Peretz called him to express Labor's support for Olmert, there were really no other candidates.

The president also expressed the hope that he would meet with the person selected to form the government before the Passover holiday begins next week.

Katsav's consultations with the other parties on forming a new government is scheduled to end Wednesday.

Olmert, whose Kadima party gained 29 seats in the elections, announced on Tuesday afternoon that his centrist Kadima party would seek to form a coalition government with the Labor party as a senior partner.

"We are happy to announce that immediately after the president gives me the mission of putting together a government, we will open coalition talks that will allow us to form a government in which the Labor Party will be a senior member," Olmert told a joint press conference with Peretz after the two leaders completed a meeting earlier on Tuesday.

Sources in Labor and Kadima said Peretz would receive the defense portfolio in the next government, and that Labor would also be given the education portfolio.

The announcement of coalition partnership between Kadima and Labor came as a surprise, signalling the end of an apparent rift between Olmert and Peretz that began after last week's national election.

However, Olmert and Peretz did not mention the division of portfolios among the parties.

Olmert, who assumed premiership after Prime Minister Ariel Sharon fell ill on Jan. 4, has vowed to set Israeli borders by 2010. He said that he would carry out further withdrawals from the West Bank but would keep large settlement blocs.

Source: Xinhua