Netanyahu will be asked to form the next Israeli government, the office of President Shimon Peres said in a statement.
Friday's announcement means Netanyahu now has six weeks to put together a ruling coalition.
The Likud party leader would meet the head of state shortly to receive a formal invitation to form an administration, it said.
Peres met separately earlier in the day with Netanyahu and centrist Kadima party head Tzipi Livni to try persuade them to form a unity government, a presidential spokeswoman said.
Tzipi Livni, leader of the Kadima party and Netanyahu's main rival, has rejected entering into a coalition with the rightwing leader.
"I will not be a pawn in a government that would be against our ideals," she said after meeting Peres.
"Things are clear. What is being created is a government without political vision, a government with no values."
While Kadima won one more seat than Likud in the Knesset, Israel's parliament, during general elections on February 10.
The president traditionally asks the party most likely to be able to form a coalition to lead the new government.
Last Mod: 20 Şubat 2009, 15:09