The president also ordered to remove constitutional hurdles for the formation of a new government as per the recommendation made by the Cabinet yesterday.
Nepal plunged into a political turmoil after Prime Minister Oli resigned just before a no-confidence vote.
In a statement, President Bhandari called on the parties to form a consensus government within a week as per the Article 298 (2) of the Constitution of Nepal.
Oli-led cabinet yesterday had recommended the President to remove the hurdles to form a new government by invoking Article 305 of the Constitution as there was no provision to elect new Prime Minister after the Prime Minister's resignation in the transition.
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The president called on all parties to move ahead in consensus, according to Prachanda's secretariat.
In response, Deuba and Prachanda- who are trying to form the coalition government - said they were also of the view that all parties should be taken into confidence while forming the new government.
Oli tendered his resignation after two key ruling alliance partners -- Madhesi People's Rights Forum-Democratic and Rastriya Prajatantra Party -- decided to support the no-confidence motion tabled against him by the Nepali Congress (NC) and the CPN-Maoist Centre led by Prachanda in the 596-member Parliament.
The no-trust motion against Oli had the support of 183 Nepali Congress parliamentarians, 70 from CPN-MC and three from CPN-United. The three parties have a combined strength of 292 in Parliament.
Oli's Communist Party of Nepal (Unified Marxist Leninist) currently has 175 elected seats in parliament, far fewer than the 299 needed to win a vote of confidence.