The formation of a grand coalition now looks very unlikely, as rival party leaders have traded accusations over the failure to reach a compromised and have vowed to win in an upcoming election.
The Knesset will likely dissolve on 12th December, and if that happens a third election is expected to take place in March 2020.
On Tuesday, a meeting between rivals Benny Gantz and Benjamin Netanyahu broke down after just 45 minutes.
Netanyahu said his Likud party had offered far-reaching compromise, but “Blue and White, Benny Gantz have not budged, not a millimetre, not even a nano metre”.
Blue and White leader Gantz said: “Despite my hopes, Netanyahu did not offer anything new that would prevent unnecessary elections. He did not agree to give up immunity, his bloc (of 55 religious and right-wing parties) and of course he did not give up on his demand to be first in a rotation. Netanyahu did not win in April, he lost in September, and if he drags us there, we will defeat him in 2020″.
With a unity government looking unlikely, hopes for a narrow government have also faded, with Yisrael Beytenu party leader Avigdor Liberman declaring that he will no longer agree to join any narrow government.