Talks to form a new Lebanese government remained deadlocked on Thursday as the two major Shiite parties stood firm on their demand to keep hold of the Finance Ministry.
Prime minister-designate Mustapha Adib met President Michel Aoun in the afternoon after 11th-hour talks with senior members of the Amal Movement and Hezbollah.
After the 30-minute meeting at the presidential palace in Baabda, Mr Adib said he had discussed the “difficulties facing us in government formation” with Mr Aoun and they agreed to more time for consultations.
But he said he was “well aware that we do not have the luxury of time”.
Mr Aoun said he urged Mr Adib to continue contacts with parties as soon as possible because the "current circumstances require urgent action to rescue" Lebanon.
Lebanese political leaders had promised French President Emmanuel Macron that they would form a government by September 15, in the first stage of a French road map for reforms in the crisis-hit country.
But the process has been held up by the insistence of Amal and Hezbollah to keep the Finance Ministry, rather than allowing a rotation of top ministries between parties.
The two parties also insist on choosing all of the Shiite ministers in the new Cabinet.
Hezbollah’s “Loyalty to the Resistance” parliamentary bloc said on Thursday that the party “categorically refused to accept anyone else naming ministers that represent them in government”, particularly the finance minister.
The party also condemned what it called an American attempt to sabotage government formation efforts.
The US Treasury Department announced new sanctions on Thursday on two Lebanon-based companies, Arch Consulting and Memaar Construction, for their links to Hezbollah.
A Hezbollah executive council official, Sultan Asaad, was also designated.
This follows US sanctions last week on former finance minister and senior Amal Movement member Ali Hassan Khalil, and former transport minister Youssef Fenianos, for alleged corruption and aiding Hezbollah.
On Tuesday, as Mr Macron’s deadline for a new government loomed, US Secretary of State Mike Pompeo said French efforts to resolve the crisis in Lebanon would be in vain without addressing Hezbollah’s weapons.
France differentiates between the military and political arms of Hezbollah and considers it to be an elected and legitimate player in Lebanese politics.
Rumours earlier flew about the purpose of Mr Adib's visit to the presidential palace.
While some suggested Mr Adib would be presenting a full Cabinet line-up, others said he would abandon the task of forming a government and step aside after only two weeks.
The deadline agreed to with Mr Macron required an incredibly fast turnaround for a country where government formation takes months of negotiations.
The French presidency on Wednesday expressed "regret that Lebanese political leaders had not managed to keep their commitments".
But the leaders said it was "not too late" for a government to be formed.
Mr Macron met the heads of Lebanon’s political blocs during a visit at the beginning of September.
It was his second trip to the country in less than a month after the explosion at Beirut port on August 4 that killed almost 200 people and damaged half of the capital.
Mr Adib, formerly Lebanon’s ambassador to Germany, was given the job of forming a government on August 31 after broad support from the establishment including Mr Aoun’s Free Patriotic Movement, Hezbollah and former prime minister Saad Hariri.
He wants to build a small cabinet of technocrats to enact reforms that will help Lebanon to emerge from its acute economic crisis and recover from the port blast.
If it does not implement these reforms, billions of dollars in international loans and grants will be in jeopardy.
Mr Adib is also pushing for a shake-up of which parties hold certain ministries, particularly the four “sovereign ministries” of finance, defence, interior and foreign affairs.
Mr Hariri condemned Mr Berri’s opposition to a rotation of the ministries, saying on Wednesday that “no sect has the exclusive right to the Finance Ministry or any other ministerial portfolio”.
He said that preventing a rotation between parties could ruin the only remaining hope to save Lebanon and its people.
Druze leader Walid Joumblatt was similarly critical of the political wrangling that delayed the new cabinet, describing the French initiative as “the last chance to stop Lebanon’s demise”.
Mr Aoun’s party also announced last week that they would not take part.
Party leader Gebran Bassil, who is Mr Aoun’s son-in-law, said that "internal and external" forces were trying to thwart government formation.
Mr Bassil criticised Mr Adib for trying to impose a line-up without broader political approval.
Hassan Diab, Mr Adib’s predecessor, announced the resignation of his government on August 10.