Lebanon's largest Christian political party will not join a new government under the terms set by caretaker premier Saad al-Hariri, but will not obstruct the formation of a new cabinet, its leader said on Thursday.

The position of the Free Patriotic Movement led by Gebran Bassil could ease the way to the formation of a Hariri-led government. But much will depend on whether Bassil's ally, the powerful Shi'ite Hezbollah, will consent to its main Christian ally staying out of government.

Hezbollah leader Sayyed Hassan Nasrallah, whose group is backed by Iran, is set to address the country on Friday.

Lebanon is in urgent need of a new government to pull it out of a deepening economic crisis.

Lebanon has been mired in political gridlock since Hariri, the leading Sunni politician in a sectarian power-sharing system, resigned on Oct. 29 and made his return conditional on leading a cabinet comprised exclusively of specialists.

The crisis took an important twist on Sunday when Lebanon's top Sunni cleric said he backed Hariri to be prime minister again, killing off a tentative compromise on another candidate for a job reserved for a Sunni.

"If Prime Minister Hariri insists on the equation 'either me or nobody else' (as prime minister) ... we in the Free Patriotic Movement ... are not concerned in participating in such a government, because its fate will be certain failure," Bassil said.

Bassil appeared to leave the door open for his party to participate on different terms, saying he supported the formation of a government made up entirely of technocrats including its prime minister.