UPDATED 11.24AM: Israeli Prime Minister Benjamin Netanyahu says he's succeeded in forming a new government, after reaching an 11th-hour coalition deal with the far-right Jewish Home party.

"I am leaving here to call the president and the speaker of the parliament to inform them that I have been able to build a government," he said in remarks at the Knesset after marathon talks with Jewish Home leader Naftali Bennett that ended late on Wednesday.
"We need to launch it next week and we shall do so," he added.

President Reuven Rivlin's office confirmed he had received a call from Netanyahu.

"The negotiations are over," Bennett said on his official Twitter account, adding, "Now we get to work."

The news came just over an hour ahead of a deadline at midnight on Wednesday (0900 AEST Thursday) for Netanyahu to fulfil the task of cobbling together a coalition government following a March 17 general election.

The deal with Bennett leaves Netanyahu in command of 61 votes in the 120-member parliament, a razor-thin majority bought at the cost of major concessions to his partners.