By Steve Scherer
ROME (Reuters) - Silvio Berlusconi, the 76-year-old leader of Italy's center-right bloc, told thousands of supporters gathered in central Rome he was ready for a snap vote as his rival began talks to try to form a government.
"We are all ready for another election campaign and this time we will win big!" the former prime minister shouted from a stage at the start of an hour-long speech. The flag-waving crowd responded with a roar.
The national election held a month ago gave no single group a working majority in parliament, leaving the euro zone's third-largest economy in limbo as the bank crisis in Cyprus renews fears of an outbreak of market turmoil in the currency bloc.
President Giorgio Napolitano on Friday asked center-left leader Pier Luigi Bersani to see whether he can win backing in parliament to form a government and end the political impasse.
The media tycoon's show of force on Saturday will put pressure on Bersani, who has so far ruled out another center-right and center-left government like the one led by Mario Monti, an option Berlusconi said was "the only solution that the election result makes possible".
It also suggests seasoned politician Berlusconi, who has already served four times as prime minister, is already in campaign mode and sees elections on the horizon, either in the summer or the fall.
The center-left won control of the lower house in the February 24-25 vote, but not the Senate, and both are needed to govern. The center-right came in second place and the anti-establishment 5-Star Movement came in third.
Beppe Grillo, leader of the 5-Star Movement, has repeatedly refused Bersani's attempts to woo him for support, saying the movement will not vote confidence in any government that includes traditional political parties.
Most members of Bersani's Democratic Party (PD) want him to avoid any sort of alliance with Berlusconi because they feel their voters would abandon the party in droves - for Grillo.
Bersani on Saturday admitted his efforts to form a government would be "difficult" but "nothing is impossible". Bersani begins talks with political leaders on Monday.
By ruling out a right-left agreement, Bersani was "playing with fire," Berlusconi said.
"They don't understand that even for a great country like ours there are grave risks and maybe even very dangerous scenarios for the private savings of families, like in Cyprus."
Bank of Italy deputy director general, Fabio Panetta, said on Saturday the political stalemate and renewed financial market turbulence could undermine the country's recovery from its longest recession in two decades.
Berlusconi is facing three ongoing trials, including one for paying for sex with a minor, and a definitive conviction would preclude him from holding political office. He denies any wrongdoing.
During the election campaign, Berlusconi staged an extraordinary comeback, winning more than 29 percent of the vote. Polls published this week showed his coalition leading the center-left and the 5-Star Movement.
On Saturday, the former lounge singer showed he had not lost his common touch with the crowd, which repeatedly chanted "Silvio, Silvio!" during his speech.
"Today I wanted to come to the rally to show that we're here, all of us - old, young - for Silvio Berlusconi," said supporter Antonia Narducci. Another held a sign that read: "Silvio, you're a greater man than Julius Caesar!"
(Additional reporting by Carmelo Camilli; Editing by Sophie Hares)