Benny Gantz, the leader of Israel's Blue and White Party and the incumbent premier's main rival, has failed to form a coalition cabinet, pushing Israel closer to holding its third election in a year.
Gantz on Wednesday attended a press conference to admit his defeat, as his Blue and White party also announced the failure in a statement ahead of the midnight deadline.
"Over the past 28 days I have left no stone unturned, and I have cleared away each grain of sand" in a bid to form a new government, he said.
He criticized the right-wing bloc and said, "There is [right-wing] bloc that finds it hard to see, that insists on seeing only see the personal interest of one person, before that of the patients lying in [hospital] corridors."
Gantz's announcement that he would not meet the midnight deadline following Prime Minister Benjamin Netanyahu's own failure to put together a coalition in October deepened political deadlock in the occupied territories.
Last month, Israeli president Reuven Rivlin tasked Gantz with forming a coalition after Netanyahu failed to do so.
Both Netanyahu and Gantz fell short of securing a required parliamentary majority in the election held in September.
There now begins a 21-day period in which Israeli lawmakers can nominate any one of the Knesset's 120 lawmakers to try and establish a coalition where others have failed.
If that fails too, an election is triggered within 90 days, raising the prospect for a weary electorate of going back to the polls after inconclusive votes in April and September.