Israeli-Arab lawmakers have recommended that the former army chief Benny Gantz should become prime minister.
Last week's election put the incumbent leader Benjamin Netanyahu neck and neck with Mr Gantz, and the two are now vying to build a governing coalition.
The Joint List, the bloc of Arab parties that came in third, says it wants to oust Mr Netanyahu from power.
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This is the first time since 1992 that an Arab political group has issued an endorsement for prime minister.
This was Israel's second general election of the year. After the first, in April, coalition talks fell apart and a snap poll was called.
Faced with yet another deadlock, Israel's President Reuven Rivlin has recommended the new government includes both Mr Gantz's Blue and White Alliance, which won 33 seats, and Mr Netanyahu's Likud party, which won 31.
Faced with yet another deadlock, Israel's President Reuven Rivlin has recommended the new government includes both Mr Gantz's Blue and White Alliance, which won 33 seats, and Mr Netanyahu's Likud party, which won 31.
Mr Rivlin has said he will do everything he can to avoid a third general election in Israel this year.
Ayman Odeh, leader of the Joint List, told President Rivlin that his alliance's priority was to prevent Mr Netanyahu from serving another term.
The Joint List won 13 seats in the election. If Mr Gantz had the endorsement of all 13 seats, he would still fall short of the 61 seats needed for a majority in the 120-seat legislature.
Mr Rivlin has said he will do everything he can to avoid a third general election in Israel this year.
