Prime Minister Benjamin Netanyahu says he has given up on his efforts to form a new Israeli coalition government, after failing to secure a majority coalition in Parliament following an inconclusive election in September.

Mr Netanyahu, Israel’s longest-serving PM who heads the right-wing Likud party, revealed on Tuesday morning (Australian time) he was returning the mandate back to Israel’s president, Reuven Rivlin.

Mr Rivlin said he will give Mr Netanyahu’s centrist rival Benny Gantz the opportunity to putting together a new government.

“In the past weeks I made every effort to bring Benny Gantz to the negotiating table, every effort to establish a broad national government, every effort to avoid another election,” Mr Netanyahu said.

Mr Gantz also has no clear path to a majority, and should he come up short, it would almost certainly lead to another general election, the third since April.

Israel’s Netanyahu gives up his effort to form a new government creating an opportunity for centrist rival Benny Gantz to replace the country’s longest serving prime minister pic.twitter.com/z3gWZkAG2x

— TRT World Now (@TRTWorldNow) October 21, 2019

Mr Gantz’s Blue and White party said in a statement it was “determined to form a liberal unity government.”

Mr Netanyahu, in power for the past decade and 13 years in total, has seen his political strength wane as he faces a looming indictment on corruption allegations he denies.

It would be the first time in over a decade that anyone but Mr Netanyahu, who turned 70 on Monday, would be given the chance to head the Israeli government.

Mr Gantz, a former military chief, has pledged not to serve in a government under a premier facing criminal charges.

Likud was second in the September ballot with 32 seats in the 120-member parliament, behind 33 for Blue and White.

-with AAP