Jakarta - Political parties led by the opposition Indonesian Democratic Party of Struggle on Friday formed a coalition in the incoming parliament but failed to announce a presidential candidate to challenge incumbent Susilo Bambang Yudhoyono in the July polls.

Other factions involved in the coalition were the Golkar Party of Vice President Jusuf Kalla, which is now part of Yudhoyono's ruling coalition; the Great Indonesia Movement, or Gerindra; and the People Conscience Party, or Hanura.

Six other minor parties that failed to gain 2.5 per cent of the votes in the April 9 legislative elections, the threshold parties must cross to enter parliament, also signed the coalition deal.

Party leaders said in a joint statement that the so-called grand coalition was aimed at strengthening political cooperation in the national and regional parliaments. They rejected suggestions the pact was a move to gang up on Yudhoyono.

Parties or coalitions that win at least 20 per cent of the seats in the 560-member House of Representatives or 25 per cent of the popular vote may nominate candidates for the July 8 presidential election.

Manual counting of legislative votes by the General Election Commission showed the Indonesian Democratic Party of Struggle
(PDI-P) of former president Megawati Sukarnopuri leading the tallies with around 19 per cent of the around 31 million votes - in contrast to the results of pollsters conducting so-called quick counts and an electronic count by the commission.

Those earlier counts said Yudhoyono's Democratic Party was set to win the polls with more than 20 per cent of the vote, followed by Golkar and the PDI-P, tied at around 14 per cent.

In the hand count, however, the Democratic Party was second with around 17 per cent and the Golkar Party had around 14 per cent.

Official final results were not due until May 9.

Yudhoyono is a favourite to win the July presidential elections with a popularity rating of more than 60 per cent while Megawati was a distant second.

Yudhoyono has set to ally with the Muslim-oriented Justice and Prosperity Party, now in fourth position in vote counting at around 8 per cent, and other smaller parties. (dpa)