The leaders of both of Likud’s largest potential coalition partners have said that talks have ground to a virtual standstill.

Meanwhile, Prime Minister Benjamin Netanyahu faces his own problems as his effective number two, Avigdor Lieberman, starts a lengthy fraud trial.

Prime Minister Benjamin Netanyahu announced on Tuesday night that Tzipi Livni's new political party, Hatnua, will join the Israeli coalition.

Ms Livni has been appointed Minister of Justice and Chief Diplomatic Negotiator with the Palestiniain Authority in the next government.

Although The most high-profile event this week was the swearing-in of the newly elected Knesset on Tuesday, with a record 48 new MKs, the real action was behind the scenes.

After President Shimon Peres had officially tasked Benjamin Netanyahu with forming a government, coalition talks began in earnest.

Much to Benjamin Netanyahu’s frustration, the Israeli election’s other two main winners, Yair Lapid and Naftali Bennett, looked set to forge a pact over the national service law this week, making it very difficult for the Likud leader’s favoured partner, Shas, to enter the government.

Martin Ivens, acting editor of the Sunday Times, has apologised "unreservedly" for the publication of Gerald Scarfe's cartoon of Benjamin Netanyahu this weekend.

Rupert Murdoch, whose company owns the Sunday Times, has apologised over the Gerald Scarfe cartoon which appeared in the paper at the weekend, calling it "grotesque."

Israel's widely predicted swing to the right was not as dramatic as expected at Tuesday's elections.

The big winner as the Jewish state went to the polls was, according to initial announcements of the results, Yair Lapid's newly formed party, Yesh Atid (There is a Future), which captured 19 Knesset seats.