Israel's political parties are holding talks to put together a coalition government, following March's election.
Ariel Sharon's reign officially ends on Tuesday
Kadima, the largest party in the new parliament, is meeting representatives of the Labour party, which came second, and several other smaller groups.
Acting Prime Minister Ehud Olmert says he wants a broad and stable government.
But he has warned that all parties in the coalition must agree with his plan to fix Israel's borders permanently with or without Palestinian agreement.
Mr Olmert has said he wants the borders to be set by 2010. Labour has made clear it would rather see a negotiated settlement than a unilateral move.
Mr Olmert was asked to form a government after the 28 March election in which his party won 29 seats in the 120-member parliament.
Last week, Labour leader Amir Peretz agreed to join a coalition government. His party won 19 seats and is expected to be Kadima's senior partner.
FINAL RESULTS (revised 3 April)
1. Kadima: 29 seats, centrist
2. Labour: 19 seats, centre-left
3. Shas: 12 seats, ultra-Orthodox
4. Pensioners: 7 seats, single-issue
5. Torah Judaism: 6 seats, ultra-Orthodox
6. Meretz: 5 seats, left-wing
7. Israel Beitenu: 11 seats, Russian emigres, far-right
8. Likud: 12 seats, right-wing
9. Arab parties: 10 seats
10. National Union/Religious: 9 seats, far-right, settlers
Talks between representatives of the two parties went on for two-and-a-half hours on Sunday and were set to resume on Tuesday.
Other parties were due to hold talks with Kadima later on Sunday and on Monday.
But Israel's Haaretz newspaper reports that Kadima has agreed not to sign any coalition agreement before signing one with Labour.
Correspondents say the coalition talks will also include lengthy negotiations about the allocation of key ministerial posts.
Mr Olmert has served as acting prime minister since Ariel Sharon suffered a stroke 4 January and was declared temporarily incapacitated.
Mr Sharon is expected to be declared permanently incapacitated on Tuesday, a move that will officially signal the end of his premiership.