Reuters International

Spain's King Felipe (L) greets Ciudadanos' leader Albert Rivera before their meeting at Zarzuela Palace in Madrid, Spain, July 28, 2016. REUTERS/Angel Diaz/Pool

(reuters_tickers)

By Sarah White and Julien Toyer

MADRID (Reuters) - Spain's King Felipe and leaders of the four main parties will make a fourth attempt on Thursday to end seven months of political stalemate, with pressure for a deal mounting as a deadline for next year's budget nears.

National elections in December and June both resulted in hung parliaments, forcing parties to try to negotiate their way to a viable coalition.

So far, leaders across the political spectrum have failed to agree terms, though insiders are hoping a deadline to pass a budget for 2017 by the end of September will concentrate minds.

Party heads, including acting Prime Minister Mariano Rajoy of the centre-right People's Party (PP), are due to meet individually with King Felipe on Thursday -- the fourth such set of talks this year -- as they seek a consensus candidate to lead the next government.

Rajoy's PP was the only one of the four to win more seats in June than in December, though with 137 lawmakers it is still well short of the 176 needed for an absolute majority in Spain's lower house.

It has been pushing for backing from rivals, which its has so far failed to secure.

Centre-right regional parties from Catalonia and the Basque Country have already said they would vote against Rajoy while liberal party Ciudadanos ("Citizens"), which came fourth on June 26, has said it would abstain in a confidence vote.

The left-leaning parties, second-placed Socialists and Unidos Podemos ("Together We Can"), oppose Rajoy.

The latest round of talks with the King could end with no candidate for prime minister emerging.

But many hope discussions over next year's budget may prove instrumental in coaxing the Socialists to eventually abstain in the investiture ballot and enable a PP government.

"If the PP wants our votes (for the budget), they'll have to agree to some of our proposals on elements that we absolutely want to have there," a Socialist source said, without elaborating on what these elements would be.

(editing by John Stonestreet)

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