Gantz’s centrist secular Blue and White party came first in last month’s elections — the second poll this year — winning 33 seats in the 120-member parliament. Netanyahu’s Likud took 32 seats.
With neither party holding a majority, Netanyahu has been asked by President Reuven Rivlin to try to form a unity government. The talks with Gantz’s party on Wednesday were to be his last attempt.
"At this stage, the preliminary conditions to hold an efficient meeting among the negotiation teams have not been met," Blue and White said in a statement quoted by the Haaretz daily.
Likud responded saying it was "stunned" by its rival’s decision to "blow up" negotiations. Netanyahu reportedly asked his challenger to reconsider.
If the negotiations fail, Gantz is expected to be asked to put together a workable coalition government. Israel may also end up having its third snap election.
