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 The encounter was their first since inconclusive elections on
Sunday, in which Rajoy's center-right People's Party (PP) won most
votes but fell way short of a parliamentary majority and the
Socialists came second.
Ahead of the meeting the leader of fourth-placed newcomers
Ciudadanos, seeking to cast his party in the role of kingmaker,
called for a three-way pact.
Such an alliance would dispel political uncertainty, including the
risk that Catalonia might declare independence from Spain, Albert
Rivera said.
The PP and the Socialists lost significant ground on Sunday to
Ciudadanos (Citizens) and a second upstart party, left-wing Podemos
(We can).
Rajoy has the first chance to form a new government, but his options
are limited.
Ciudadanos has said it would abstain in a parliamentary vote on a
new PP administration.
That would still leave Rajoy's party short of the support it needs
to govern, and it appears virtually impossible for him to stay in
power without the support of the Socialists, or at least their
abstention too.
But several senior Socialist officials have already said the party
should be in opposition and would reject any government led by Rajoy
or the PP.
Rivera said Ciudadanos wanted three-way talks on reforms, excluding
third-placed Podemos.
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"We propose a pact between the PP and the PSOE so that nobody takes
advantage of the weakness, uncertainty and instability to break up
this country," he told a news conference in Madrid.
Rajoy has also left Podemos out of potential talks due in part to
the party's position on Catalonia, which it says should be given the
right to a referendum on independence, something the other parties
vehemently oppose.
The Socialists, already hemorrhaging support to Podemos, will be
mindful of what happened to Greece's once powerful center-left
party, Pasok, which has seen its support plunge since it joined a
coalition led by the center-right New Democracy in 2012.
(Reporting by Julien Toyer and Blanca Rodriguez, writing by Paul
Day; Editing by John Stonestreet)
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