"Our goal is to form a stable government, which is united, with a joint programme, goals and an action plan for three years," former President Valdis Zatlers, whose party came second following the 17 September snap elections (see ' Background'), was quoted by Baltic news agency BNS as saying.
He spoke after a meeting with current Prime Minister Valdis Dombrovskis, whose Unity party came third. The two parties see each other as natural allies and want to keep on the path of fiscal austerity leading to euro adoption in 2014.
Harmony Centre, supported mostly by Latvia's large Russian minority, hoped to exploit anger over the ruling centre-right's public sector wage cuts and fear over its pursuit of euro membership when Europe is struggling with a debt crisis.
If Harmony realises its goal of forging a coalition, it could help Russia increase its influence in the NATO member and EU state, which has not had a party catering to its Russian minority in government since independence.
Harmony is due to begin talks with parties on Monday, but two centre-right ethnic Latvian parties, runners up in the election, got negotiations underway on Sunday.
Though it came first in the election, Harmony's number of votes rose only slightly since the last ballot in October 2010. A lower turnout helped raise its share of the votes.
The election commission said Harmony Centre won 31 seats in the 100-seat parliament, two more than a year ago. The Zatlers party, newly created, won 22 while Unity won 20 for a combined total of 42. Unity alone last time won 33 seats.
Harmony Centre leader Nils Usakov, whose party has ties to Russian Prime Minister Vladimir Putin's United Russia, had campaigned for a delay in entering the euro and for the terms of the 7.5 billion euro bailout taken in 2008 to be re-negotiated.
"If Harmony Centre gets appropriate support from voters, then certainly we will strive to gain leading places in government, so as together with partners we could implement necessary reforms and together fight the economic crisis," Usakov told Reuters Television after voting on Saturday.
Speaking to local LNT television, Usakov seemed to soften his stance on the portrayal of Russian involvement in Latvia, saying he was not allergic to the word occupation - which is how most Latvians view the 50 years of Soviet rule.
However, the 35-year-old party leader said Russian-speakers who arrived during Soviet times should not be labelled as "occupiers".
About a third of the 2.2 million population are Russian speakers and just over half of them have the right to vote.
The election was called to break the power of oligarch businessmen less than a year after the last poll.
Turn to nationalists?
Zatlers' party was also due to hold talks with a nationalist bloc on Sunday. Analysts say the All for Latvia-For Fatherland and Freedom-LNNK could link with Zatlers and Dombrovskis to form a majority. It doubled its parliament presence to 14 seats.
President Andris Berzinsh is responsible for nominating the prime minister. He has said he will only do that after 28 September, when he returns from a trip to the United Nations in New York, giving parties time to agree on a coalition.
In a statement, he said the new government had to be able to work for the full three years of its term, successfully complete reforms which went with the country's 2008 bailout, and strengthen state finances and budget discipline.
Such words would seem to favour Dombrovskis and Zatlers.
Dombrovskis, 40, led Latvia through a package of public sector pay cuts, which saw some salaries reduced by 50%, and higher taxes after the 2008 crisis. He says his policies restored international confidence in Latvia and brought about a recovery from an 18% drop in economic output in 2009.
Zatlers forced the election by ordering the dissolution of parliament after lawmakers refused permission for prosecutors to search a flat owned by a businessman, who is also a member of parliament and one of three men labelled as an oligarch.
Opponents say the lawmaker and two others have used their wealth to influence politics and favour their business interests. The men have denied any wrongdoing.
Two of the three "oligarchs" lost their places in parliament, while a farmers' party spearheaded by the third had its representation cut to 13 seats from 22, the results showed.
EurActiv with Reuters
