Israel's president yesterday extended the deadline for Prime Minister-designate Tzipi Livni to form a parliamentary coalition, giving her two more weeks to establish a government or face the prospect of a new election.

The move by President Shimon Peres was largely a formality. But it highlighted the difficulties for Livni as she tries to create a stable government capable of reaching a far-reaching peace agreement with the Palestinians.

Livni was elected leader of the ruling Kadima party last month, giving her 28 days to put together a government. Unsuccessful after weeks of negotiations, she asked Peres for the two-week extension yesterday.