"The choice is between the advancement and actualization of a vision for two states for two peoples or losing our path in this realm," she was quoted by Ha'aretz as telling Kadima members.

"If we compromise in order to be partners in a government which has a path that is not our path, it will be betraying the confidence of voters," said the Kadima leader.

In a statement released following the faction meeting, Kadima lawmakers said acceptance of the party's centrist policies on peace and domestic issues was "a condition for (the party) joining any unity government."

Meanwhile, Netanyahu warned on Sunday that he would not be bullied into forming a unity government.

"Unity can be achieved by dialogue, not by dictates, not by arm-wrestling," said the Likud leader. "That's what we will do today -- we'll begin the effort to join hands, first with Kadima, and tomorrow with the Labor Party."

Israeli center-right Likud party leader Benjamin Netanyahu (R) meets with Israeli Foreign Minister and centrist Kadima party chairwoman Tzipi Livni for talks on forming the coalition government in Jerusalem, Feb. 22, 2009.[Yin Bogu/Xinhua]