JERUSALEM - Israel edged closer to a government of hawks and right-wing religious parties Friday after Prime Minister-designate Benjamin Netanyahu failed to persuade his chief moderate rival to join a coalition that could help avert a showdown with the Obama administration.
Foreign Minister Tzipi Livni refuses to sign up unless Netanyahu openly endorses the vision of dividing the land into separate Jewish and Palestinian states.
"Two states for two peoples is not an empty slogan -- it is the only way Israel can keep its existence as a Jewish, democratic state," Livni said after their meeting. "Just as I cannot accept vague statements, neither can the world. This is a matter of principle, not semantics."
Netanyahu said he had made Livni a generous offer of partnership, adding that he intended to promote the diplomatic process with the Palestinians. Nevertheless, he said he encountered a "complete rejection of unity from Ms. Livni."
The breakdown in their talks came as President Barack Obama's Mideast envoy George Mitchell was in the region meeting with Israeli and Palestinian leaders.
Livni did not shut the door completely on an agreement, and Netanyahu still has five weeks to cobble together a government. The two deadlocked in the Feb. 10 election, but Netanyahu was appointed to form a coalition because he had greater support from the elected lawmakers.
Netanyahu can form a hard-line government that will give him a 65-seat majority in the 120-seat parliament. But that means virtually any of his partners could bring down the government in a dispute. A centrist government with Livni also would help Netanyahu ward off international pressure and avoid a clash with a U.S. president who has promised to become "aggressively" involved in pursuing Mideast peace.
Livni, who heads the centrist Kadima Party and served as chief negotiator with the Palestinians, supports the formation of a Palestinian state in the West Bank and Gaza Strip. Netanyahu does not.
Diplomatic activity continued Friday, with European Union foreign policy chief Javier Solana touring Gaza. He was the highest ranking European official to visit the territory since it was overrun by Hamas in June 2007.
Solana did not meet with representatives of Hamas, boycotted internationally as a terror group. The international community has demanded the group recognize Israel and renounce violence, conditions it has refused.
"I came to express solidarity with the people of Gaza and to tell them that we will be helping them in the reconstruction process," Solana said, standing at the ruins of the American International School of Gaza, which was destroyed by Israeli bombs during its recent offensive against Hamas militants.
On Monday, international donors will meet in Egypt for a conference on Gaza's reconstruction. The Palestinians are seeking $2.8 billion dollars. The EU's executive office, the European Commission, said Friday it was earmarking $556 million for the Palestinians in 2009, though it was not clear how much would go to Gaza. The U.S. is expected to pledge $900 million.
Israel and Hamas are holding talks through Egyptian mediation meant to produce a long-term truce in Gaza in the aftermath of Israel's three-week offensive against Hamas, which ended Jan. 18. Hamas wants Israel to open Gaza's blockaded border crossings, a step Israel says it won't take until Hamas returns an Israeli soldier held since June 2006.
Hamas is also holding talks with its Fatah rivals aimed at ending the violent spat between them, which culminated in Hamas' rout of Fatah and takeover of Gaza. The goal is to forge a power-sharing agreement.
