The two men had held talks through the night "aimed at establishing a national emergency government to deal with the corona crisis and the additional challenges facing the State of Israel," a joint statement said.
Israeli Prime Minister Benjamin Netanyahu and his erstwhile rival Benny Gantz on Sunday announced "significant progress" in talks towards forming an emergency unity government amid the novel coronavirus pandemic.
Gantz, whose now fractured centrist Blue and White alliance had positioned itself as the alternative to Netanyahu in three inconclusive elections over the past year, was elected parliament speaker Thursday.
The two men had held talks through the night "aimed at establishing a national emergency government to deal with the corona crisis and the additional challenges facing the State of Israel," said a joint statement from Blue and White and Netanyahu's Likud.
"Significant progress was made during the meeting," it added.
"During the course of the day, an additional meeting will be held in order to come to a finalised agreement."
Gantz was tasked with forming a government following the March 2 vote — something he had been unable to do after two elections last year.
There was no guarantee he would succeed this time, given a lack of cohesion within the anti-Netanyahu bloc.
The divided anti-Netanyahu forces, who held a narrow majority in the Knesset, Israel's parliament, forced the ouster this week of speaker Yuli Edelstein, a member of Netanyahu's Likud party.
Gantz then put himself forward as speaker, triggering the break-up of Blue and White, with two key partners -- the Telem and Yesh Atid parties -- accusing Gantz of surrendering "without a fight" to Netanyahu.
Gantz and Netanyahu have both previously voiced support for a unity government to help combat the coronavirus pandemic, which has so far seen over 3,800 Israelis infected, including 12 deaths.
On Friday, Gantz justified his move as being "what my nation needs" given the coronavirus pandemic.
"I won't be the one who categorically refuses to step in and pull my weight in a state of emergency," he wrote on Facebook.
There were no official details of the likely makeup of a future government, but Netanyahu has in past weeks proposed 18-month premiership terms — with him taking the first, to be followed by Gantz.
The veteran premier, in office since 2009, was in January charged with bribery, fraud and breach of trust, with the start of his trial delayed due to the virus pandemic.
Netanyahu denies the charges.