Longtime rivals Benjamin Netanyahu and Benny Gantz look set to temporarily set aside their differences and form a unity government to tackle the COVID-19 outbreak after a year of deadlock in Israeli politics.

The Times of Israel reported late on Thursday, after Gantz was elected parliament speaker in a surprise development, that the leader of the Blue and White faction will initially serve as foreign or defense minister in the alliance before replacing Netanyahu, indicted on corruption charges, as prime minister in September 2021.

Speaking after being elected speaker of the Knesset, Israel's parliament, Gantz said Israel needed an "emergency" unity government to deal with the COVID-19 pandemic. Israel has more than 2,600 confirmed coronavirus cases and has imposed a total, nationwide ban on non-essential movement in the hope of containing contagion. 

However, Gantz's decision is controversial and no agreement has been formalized. His erstwhile ally Yair Lapid accused the former military chief of surrendering "without a fight," declaring the break-up of the Blue and White Alliance that Gantz had led. 

The centrist Gantz and right-winger Netanyahu had fought three bitter, inconclusive elections over the past year, with neither heavyweight securing enough support to form a viable coalition in Israel's fractious political system.  

This week, the divided anti-Netanyahu forces, who held a narrow majority in the Knesset forced Yuli Edelstein, a member of Netanyahu's Likud party, out of the speakership. Gantz then put himself forward as Edelstein's replacement on Thursday. 

"These are unusual times and they call for unusual decisions," Gantz told the Knesset after his election. "That is why I intend to explore the formation of an emergency unity government," he added. 

Likud, in a statement, did not deny talks on a unity government but said details emerging about its make-up were merely "rumors."

Netanyahu is the first Israeli premier to be indicted while in office, after being formally charged with bribery, fraud and breach of trust in January. The veteran premier, in office since 2009, denies the charges.

Gantz had previously ruled out serving alongside a prime minister under criminal indictment, but that was before the coronavirus pandemic unfolded. Netanyahu has offered Gantz a series of deals since an election on March 2, including scenarios where the job of premier would rotate between the two.

(With input from agencies)