Greece starts a second day of coalition talks under the gun from financial markets and world powers after elections won by pro-euro parties that also reflected rising anger against austerity.
The New Democracy conservatives who came first in the elections said they had struck a preliminary agreement with the socialists Pasok to form "a government of national salvation" to rescue Greece from its devastating economic crisis.
Pasok has voiced hope for a deal later on Tuesday but insists that the new government should include other parties including the radical leftist Syriza, which has already ruled out taking part in any New Democracy-led coalition.
Europe and the United States have urged Greece to move quickly to form a new government and enact reforms under the terms of a controversial multi-billion bailout deal with the European Union and the International Monetary Fund.
"The country cannot remain ungoverned even for an hour," Greek President Carolos Papoulias said on Monday, as he gave a three-day mandate to form a coalition to New Democracy's Harvard-educated leader Antonis Samaras.
World stock markets initially rallied in reaction to Sunday's elections and the euro rose sharply against the dollar but the gains quickly petered out amid broader concerns about other indebted euro economies like Italy and Spain.
Syriza, which has called for the EU-IMF bailout deal to be scrapped and renegotiated from scratch, won more than a quarter of the vote in Greece's most important elections since the end of military rule in 1974.
Samaras's conservatives won 129 of the 300 parliamentary seats, Syriza won 71 seats and Pasok 33 seats. The small Democratic Left party, a pro-European movement seen as a possible coalition partner with New Democracy, won 17 seats.
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