JERUSALEM (Reuters) - Benjamin Netanyahu's chances of becoming Israel's prime minister were boosted on Thursday by the conditional backing of an ultranationalist politician who emerged as a kingmaker in a photo-finish election.

Avigdor Lieberman, leader of the Yisrael Beiteinu party, recommended to President Shimon Peres that he tap Netanyahu to form a government, if the right-wing Likud chief pursued a broad coalition. Netanyahu has said he would do so.

Peres could announce as early as Friday, after wrapping up consultations with party leaders, whether he will ask Netanyahu or centrist Kadima chief Tzipi Livni, Israel's foreign minister, to put together a governing coalition.

Both laid claim to the premiership after Kadima won 28 seats in the 120-member parliament to Likud's 27 in an inconclusive February 10 election that deepened uncertainty about future peace moves with the Palestinians.

With Lieberman's support, Netanyahu has the backing of some 65 legislators, enough for a narrow, governing majority of right-wing and Jewish religious parties.

In a statement, Kadima said that in light of the apparent decision of 65 Knesset members to support Netanyahu, Livni had told party members the stage had been set for an extreme, right-wing government headed by Netanyahu.

We must represent an alternative of hope and go into the opposition, the statement quoted Livni as saying. Peres was widely expected to meet Livni and Netanyahu on Friday before making his decision.


Lieberman, an immigrant from the former Soviet Union who has been at odds with religious parties and is reviled by Israel's Arab community, made unity the theme of his remarks to Peres.

We recommend Benjamin Netanyahu, only in the framework of a broad government, Lieberman told reporters.

We want a government of the three biggest parties, Likud, Kadima and Yisrael Beiteinu, he said, without disclosing what he would do if a unity government proved impossible to achieve.

A Yisrael Beiteinu official said Lieberman sought a broad coalition out of concern that creation of a narrow, rightist government could lead to friction with the Obama administration, which has pledged to pursue Palestinian statehood.

Kadima has said it would be willing to relinquish parts of the occupied West Bank in exchange for peace, a position that would put it in conflict with Yisrael Beiteinu and Likud.

Yisrael Beiteinu, which won 15 seats in last week's poll, has angered Israel's Arab citizens by proposing a law under which Israelis would have to pledge allegiance to the Jewish state as a condition for voting or holding office.

The party also wants to trade land inside Israel in which many of the country's 1.5 million Arabs live for Jewish West Bank settlements in any peace deal with the Palestinians.

Under Israeli law, the legislator designated by Peres to try to form a government has 42 days to complete the task. Traditionally, after an election, past presidents have picked the leader of the party that won the most votes, but there is no legal obligation to do so.

(Additional reporting by Allyn Fisher-Ilan, Writing by Jeffrey Heller; Editing by Charles Dick)