By Jeffrey Heller
JERUSALEM (Reuters) - A surprise alliance between far-right and centrist Israeli political stars who reject privileges for ultra-orthodox Jews is frustrating Prime Minister Benjamin Netanyahu's efforts to form a new government.
More than a month after Israel's election, Netanyahu is still without a new coalition, his hopes of enlisting traditionally loyal ultra-Orthodox cabinet partners challenged by a pact between newcomers Yair Lapid and Naftali Bennett.
Lapid, a former TV anchor who heads the centrist Yesh Atid party, and Bennett, millionaire leader of the far-right Jewish Home, surged into second and fourth place in Israel's 22 January election, boosted in part by their opposition to blanket military draft exemptions enjoyed by the ultra-Orthodox.
Their two parties control a kingmaking 31 of parliament's 120 seats, as many as Netanyahu's rightist Likud-Beitenu list, which won the election but with a weaker-than-forecast showing that left him off-balance as he strives for a third term.
Lapid, 49, gained wide backing among young, secular voters and has called for peace talks with Palestinians. Bennett, 40, rejects any future Palestinian state and has strong support among Israeli settlers in the occupied West Bank.
But despite hailing from different ends of the political spectrum, the two leaders agree on a need to "share the national burden" - a rejection of privileges for the ultra-Orthodox.
Both men say they will not join a Netanyahu-led government without the other. Barring any radical repainting of the current political picture, Netanyahu needs the support of at least one of them to achieve a parliamentary majority.
"My word is my bond," Bennett wrote on his Facebook page on Sunday, promising to keep to his all-or-nothing pact with Lapid.
That position is effectively keeping religious parties out of a potential cabinet, dashing Netanyahu's hopes for a broad coalition including proven allies that backed his policies while receiving generous state funding for religious institutions.
"The main reason I have not finished forming a government is because there is a boycott of a sector in Israel, and this is unacceptable from my perspective," Netanyahu said on Saturday, accusing Lapid and Bennett of blackballing the ultra-Orthodox.
Netanyahu, 63, made the remarks during a stiff, formal audience with President Shimon Peres, who approved the prime minister's request for more time to build a coalition.
A 28-day period to do so has already expired and if Netanyahu - now with an extra 14 days - fails to break the deadlock in coalition talks by March 16, Peres can pick another candidate or call a snap election.
So far, Netanyahu has recruited only one party, centrist Hatnua, led by former foreign minister Tzipi Livni. He was due to hold further talks with Bennett later on Sunday.
On his Facebook page, Lapid said he did not believe that Netanyahu's current ultra-Orthodox allies, Shas and United Torah Judaism, could be part of a government that wants to make fundamental changes in state benefits for the devout.
"Politicians sometimes have to be ready to pay the price of their convictions. The only conclusion is that it would be no tragedy if they sit in the opposition in the coming term," Lapid wrote about the religious parties.
Shas leader Eli Yishai appeared to concede on Sunday, saying on Facebook: "?In the coming days, a government will finally be formed, without the ultra-Orthodox."
With Yesh Atid, Jewish Home and Hatnua - and excluding the ultra-Orthodox, who won 18 parliamentary seats - Netanyahu could have a majority government controlling 68 seats. Recruitment of another centrist party, Kadima, would give him 70 seats.
But it could be an uncomfortable mix for Netanyahu, whose government's survival would then be in Bennett's and Lapid's hands, vulnerable to their differences over peace talks.
Netanyahu has pledged ahead of a visit later this month by U.S. President Barack Obama, to try to move forward in peace efforts stalled for the past two years in a dispute over his refusal to halt Israeli settlement-building in the West Bank.
Lapid wants to restart the peace negotiations. Bennett would likely oppose any move to renew a settlement construction freeze sought by the Palestinians.
(Editing by Peter Graff)