Israel's Benny Gantz called for an emergency unity government after being elected parliament speaker Thursday, surprise developments that point towards an interim alliance with Prime Minister Benjamin Netanyahu to tackle coronavirus.

Gantz's moves appeared to offer the premier, indicted on corruption charges, a path to extend his 11-year tenure, although no agreement had yet been declared and the shifting political landscape was causing significant fallout within the anti-Netanyahu bloc.

Gantz ally Yair Lapid, who broke with the ex-military chief earlier on Thursday, accused him of surrendering "without a fight", declaring the break-up of the Blue and White Alliance that Gantz had led.

The centrist Gantz and right-winger Netanyahu had fought three bitter, inconclusive elections over the past year, with neither heavyweight securing enough support to form a viable coalition in Israel's fractious political system.

Gantz was tasked with forming a government following the March 2 vote -- something he was unable to do after two elections last year.

There was no guarantee he would succeed this time, given the lack of cohesion within the anti-Netanyahu bloc.

The divided anti-Netanyahu forces, who held a narrow majority in the Knesset, Israel's parliament, forced the ouster this week of ex-speaker Yuli Edelstein, a member of Netanyahu's Likud party.

Gantz then put himself forward as Edelstein's replacement on Thursday, a dramatic move widely seen as an acceptance that he would not be prime minister -- at least not yet.

"These are unusual times and they call for unusual decisions," Gantz told the Knesset after his election to the speaker's post.

"That is why I intend to explore the formation of an emergency unity government," he added.

Likud, in a statement, did not deny talks on a unity government but said details emerging about its make-up were merely "rumours."

Any arrangement would likely be temporary, perhaps lasting long enough for Israel to pass through the worst of the coronavirus pandemic.

Israel has more than 2,600 confirmed coronavirus cases and has imposed a total, nationwide ban on non-essential movement in the hope of containing contagion.

Benny Gantz (left) backed an emergency unity government -- a call previously made by his rival, Prime Minister Benjamin Netanyahu (right)
Benny Gantz (left) backed an emergency unity government -- a call previously made by his rival, Prime Minister Benjamin Netanyahu (right) AFP / JACK GUEZ

"The people of Israel are justifiably looking to us and expecting us to keep supporting the sacred battle against coronavirus and its effects," Gantz said.

While attention has immediately turned to the expected unity deal, Gantz's move also triggered a break-up of his centrist bloc.

Two key partners in the Blue and White alliance -- the Telem and Yesh Atid parties -- immediately filed paperwork to split from Blue and White.

Lapid, who heads Yesh Atid, said "Benny Gantz decided today to break apart Blue and White and crawl into Netanyahu's government."

"What's being formed today isn't a unity government and not an emergency government. It's another Netanyahu government. Benny Gantz surrendered without a fight," he added.

Blue and White sources indicated to AFP that the bloc would retain its name, but no longer considered Gantz its leader.

"I founded Blue and White, and I am proud of it," Gantz told parliament on Thursday.

"It has been my intention, and it is still my intention, to do everything possible to keep us together. I urge all of my potential political partners to act in the same spirit," he said.

Netanyahu is the first Israeli premier to be indicted while in office, after being formally charged with bribery, fraud and breach of trust in January.

The veteran premier, in office since 2009, denies the charges.

Gantz had previously ruled out serving alongside a prime minister under criminal indictment, but that was before the coronavirus pandemic unfolded.

Netanyahu has offered Gantz a series of deals since the March 2 vote, including scenarios where the job of premier would rotate between the two.