Former military chief Benny Gantz received an official mandate on Wednesday to attempt the difficult task of forming Israel's next government after Benjamin Netanyahu failed.
Mr Gantz, head of the centrist Blue and White party, was given 28 days to put together an administration by President Reuven Rivlin in a televised ceremony.
Failure could lead to Israel's third ballot within a year after inconclusive elections in April and September.
Mr Netanyahu had the first chance to form a government after assembling a large right-wing bloc, but announced this week that he failed to build a 61-seat majority.
It is the first time in more than a decade that someone other than Israel's longest leader has been given the job.
Mr Gantz, a lifelong military man, has promoted himself as a practical leader who can bridge Israel’s many divisions and address the security threats it faces.
His low-key campaign was in sharp contrast to Mr Netanyahu’s, which was marked by announcements about a suspected Iranian nuclear site and plans to annex large parts of the occupied West Bank.
Mr Gantz also presents himself as more trustworthy than scandal-plagued Mr Netanyahu, and may hope to draw parallels with past generals who became statesmen, including Moshe Dayan, Yitzhak Rabin and Ariel Sharon.
He has been endorsed by only 54 legislators representing parties that are unlikely to sit together in a coalition.
Mr Gantz and Mr Netanyahu say they favour a national unity government.
Together, the incumbent's Likud and his rival’s Blue and White control a solid 65-seat majority. But the two men are divided over who should lead a new government.
Mr Netanyahu has insisted he lead the government, at least for the first two years, and that it include his right-wing allies. Mr Gantz has repeatedly rejected those conditions.
Mr Netanyahu is likely to be indicted on corruption charges in the coming weeks, and Mr Gantz has said he should resolve his legal troubles before returning to the top post.
But Blue and White invited Likud negotiators to a meeting planned for Thursday.
Mr Gantz could break up the right-wing alliance and recruit some of the smaller parties to his coalition, but that might be seen as a major betrayal by those parties’ voters.
Another option would be to form a minority government with Avigdor Lieberman, who emerged as a king-maker after his party won eight seats and refused to endorse either candidate.
Mr Gantz might be able to convince the Arab Joint List, which won 13 seats, to support the coalition from the outside.
That would bring down Mr Netanyahu but result in a highly unstable government.
It is also far from clear that Mr Lieberman, a nationalist with a history of harsh speech towards the Arab minority, would support such a scheme.
No Arab party has ever sat in an Israeli government.
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