Prime Minister Benjamin Netanyahu and Yesh Atid leader Yair Lapid held long, informal coalition talks Thursday afternoon, and reportedly discussed whether Lapid’s Yesh Atid party would sit in a government alongside the ultra-Orthodox Shas.

Tuesday’s election placed political newcomer Yapid at the helm of the country’s second-largest party, and one of his central demands is conscription for ultra-Orthodox Israelis — a move bitterly opposed by Shas.

The two leaders met for two-and-a-half hours, at Netanyahu’s official residence in Jerusalem. Significantly, this was the first face-to-face coalition meeting Netanyahu has held since Tuesday’s elections.

A statement from the Prime Minister’s Office said the talks took place in “a very good atmosphere” and focused on “the challenges facing the state.” The two agreed to meet again shortly.

Netanyahu was also reportedly to meet soon with Shas’s Eli Yishai. He spoke earlier with Jewish Home leader Naftali Bennett, and subsequently called Meretz head Zahava Gal-on, Labor’s Shelly Yachimovich, Hatnua’s Tzipi Livni and Kadima’s Shaul Mofaz in a round of post-election conversations.

Gal-on told Netanyahu she would not enter a coalition with him.

Yachimovich agreed to meet with Netanyahu, but told the prime minister that the gap between them on socio-economic issues was too large to bridge. “We plan to be a combative opposition,” Yachimovich told Netanyahu according to a Labor Party press release. “When it comes to resuming the diplomatic process with the Palestinians, the Labor Party will support any advances.”

Formal negotiations on a new government can begin only after President Shimon Peres meets in the next few days with the various party leaders and hears their recommendations for the best candidate to form the new government. Tuesday’s elections, giving Netanyahu’s Likud-Beytenu 31 seats, mean he is certain to be the favored choice. Lapid’s 19 seats make him a prime potential coalition partner.

Both leaders have publicly expressed a desire to see a broad coalition lead the country in the coming years. However, Netanyahu may also want to have a leaner, more efficient cabinet, in the spirit of national economic responsibility.

Knesset workers dissasemble the cabinet table in the Knesset's plenum (imgae capture: Channel 2)

Knesset workers disassemble the cabinet table in the Knesset’s plenum (photo credit: screenshot Channel 2)

Channel 2 showed workers taking apart the large cabinet table in the Knesset plenum on Thursday, in a possible symbol of plans for a less bloated government.

On Wednesday, Lapid said he would not join a blocking majority, as urged by left-wing party leaders, to prevent the prime minister from forming a government. His comment virtually guaranteed that Netanyahu will continue as prime minister.

Netanyahu has numerous coalition options but it was telling that his first meet was with Lapid, rather than right-wing rival Naftali Bennett or leaders of one of the two ultra-Orthodox parties — his “natural” allies.

It was rumored Thursday night that Lapid might want the job of foreign minister, and for his No. 2 Rabbi Shai Piron to be education minister, but such speculation is bound to become the norm in coming weeks as coalition talks intensify.

Former foreign minister and Yisrael Beytenu head Avigdor Liberman hinted Thursday that he would be willing to abandon his own preference for taking back the foreign affairs portfolio — he resigned last month to battle a corruption charge — in favor of Lapid. On Wednesday, Liberman had intimated that because of his concern for socioeconomic affairs, Lapid might more naturally gravitate to the Finance Ministry.

“The Foreign Ministry portfolio doesn’t have my name on it,” Liberman said Thursday.

In the call earlier Thursday, Jewish Home’s Bennett and Netanyahu congratulated each other on their election successes, although the two did not schedule a face-to-face meeting.

Despite that fact that Jewish Home quadrupled the national religious voice in the Knesset to win 12 seats, the party was not at the top of Netanyahu’s call list.

Netanyahu had contacted Shas chairman Yishai, United Torah Judaism’s Yaakov Litzman and Lapid shortly after the first exit polls came out on Tuesday evening.

In the past three months, while campaigning was at its peak, Netanyahu’s Likud party expended great effort to discredit Bennett’s party, which it saw as the main competitor for the right-wing vote.

Bennett worked as an aide to Netanyahu during his first term as prime minister.

On Wednesday, Netanyahu laid out his principles for forming a new government. Netanyahu said that a more equitable distribution of the national burden, affordable housing and changing the system of government would be his coalition’s top three priorities.

“I spoke to [Likud-Beytenu No. 2] Liberman and we decided that we will focus our talks on these three core issues, in addition to maintaining Israel’s security, in an effort to build as broad a coalition as possible,” Netanyahu told reporters the day after the election.

The declaration seemed to be aimed primarily at Lapid, who won 19 seats with a campaign that focused exactly on those issues.