Channel 2 TV reported Thursday that Netanyahu's Likud Party will merge with the ultranationalist Yisrael Beitenu to form a broad, hawkish bloc.
The station speculated that the merger was meant to pre-empt the threat of an emerging centrist bloc led by the resurgent Labor party.
Polls have predicted that Likud will win the most seats in the January election, with Labor finishing a close second.
Party spokesmen would not comment. Netanyahu and Yisrael Beitenu's leader, Foreign Minister Avigdor Lieberman, were set to appear at a news conference later in the evening.
(Copyright 2012 by The Associated Press. All Rights Reserved.)