President Reuven Rivlin gave his consent to 65-year-old Netanyahu yesterday to establish a new coalition government - his historic fourth - recognising his surprise victory in the March 17 election despite a divisive campaign.
This was hours after Rivlin received the official election results showing Netanyahu's Likud with 30 Knesset seats to lead all parties.
According to experts, Netanyahu is well set to put together a right-leaning cabinet that would control 67 of the Knesset's 120 seats in what is seen as a large majority in the Jewish state where a single party has never been able to secure a complete majority by itself.
However, the President appeared critical of Netanyahu as he handed him a mandate to form a new government after verifying with party leaders that a majority supported him and said the premier faced some "critical tasks", the first being "improving relations with the United States".
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"The elections are the only referendum in our democracy... Shame on us if we view the fulfilment of the democratic duty of voting as a curse or something that must be warned against.
"Those afraid of ballots will end up getting stones thrown in the streets," Rivlin said.
Netanyahu tried to reach out to Palestinians after he backtracked from his own six-year-old policy on the eve of elections and ruled out a Palestinian state in a last-ditch effort to woo right-wing voters.
Netanyahu, whose acrimonious electioneering had strained ties with the US and drew accusations of racism from the country's Arab minority, said he will try to "mend the rifts".
Accepting the task of putting together the new government, he pledged to shore up crumbling ties with the US even as he vowed to continue to oppose an emerging nuclear deal with Iran.