Conservative acting Prime Minister Mariano Rajoy is meeting Socialist party leader Pedro Sanchez to wrap up a round of talks with party leaders as he searches for support to form a new government in Spain following a second inconclusive election last month.

Rajoy's Popular Party won the June 26 vote with 137 seats, but although the victory margin was noticeably wider than in the December vote the party still failed to achieve an absolute majority in the 350-seat Parliament.

Sanchez has so far said his second-placed party, with 85 seats, will vote against Rajoy's candidacy, which could force Spain into a third round of elections.

Third-place left-wing alliance Unidos Podemos, with 71 seats, also opposes Rajoy while fourth-place, business friendly Ciudadanos, with 32, says it is prepared to abstain.