Austria's far-right FPOe party on Tuesday agreed to enter talks on forming a coalition government with incoming chancellor Sebastian Kurz, offering a fresh boost to populist parties in Europe.

The conservative chancellor, 31, invited the FPOe (Freedom Party) for talks, paving the way for the party to return to power nearly two decades after it last entered government in 2000.

"We have accepted this invitation," said FPOe leader Heinz-Christian Strache. His party came third in elections on October 15.

The last time the FPOe entered government, Austria was ostracised in Europe. The party's then leader Joerg Haider praised Hitler's "orderly" employment policies.

But such a backlash is not expected this time. The FPOe -- founded by ex-Nazis after World War II -- has sought to soften its image.

Its recent rise has mirrored that of other populist parties in Europe.

- 'Stable government' wanted -

Kurz earlier said that "very constructive" preliminary talks had already been held between his People's Party (OeVP) and the FPOe.

He said he hoped an agreement would be reached by Christmas.

"Austria deserves to have a stable government formed quickly," he said.

Kurz, nicknamed "wunderwuzzi" ("whizz-kid"), took over the conservative OeVP in May. He attracted supporters by depicting himself as a breath of fresh air, talking tough on immigration and vowing to slash taxes and red tape.

The OeVP won 31.5 percent of October 15's vote, followed by the centre-left Social Democrats on 26.9 percent.

Their leader Christian Kern is preparing his party to lead the opposition, saying they will face "two right-wing populist parties whose positions have been getting closer for some time."

The FPOe, which has long been critical of the European Union, came a close third with 26.0 percent, just short of its 1999 record of 26.9 percent under Haider.

- 'Sushi coalition' -

Kurz, who is set to become the world's youngest leader, on Tuesday insisted a "clear pro-Europe orientation" was a prerequisite for entering a coalition with his party.

He said last week he expected Austria to play an "active" role in the EU.

Strache has called the talks a "starting point" but warned that an agreement is not guaranteed.

"They will not necessarily succeed because we have several conditions and we do not seek to enter the government at any cost," he said.

The FPOe is demanding increased border security, Swiss-style direct democracy and economic reforms.

Its leaders have also said Islam "has no place" in Austria.

After he dined in Strache's home following his electoral victory, Austria dubbed Kurz's ties with the FPOe leader the "sushi coalition", named after the dish that was served.

"We agree on some points and disagree on others," Kurz said Tuesday, without elaborating.

Last week he vowed "zero tolerance" on anti-Semitism in any future government.

- Israel ties -

Israel temporarily withdrew its ambassador to Austria in 2000 over Haider's praise of Hitler and SS veterans, but relations were normalised in 2003 under prime minister Ariel Sharon.

Strache, who has headed the FPOe since 2005, has moved to improve relations with the Jewish state.

The 48-year-old has visited Israel several times, lastly in April 2016 when he met members of Prime Minister Benjamin Netanyahu's government and laid a wreath at the Holocaust memorial Yad Vashem.

Israel's foreign ministry stressed at the time that it was a "strictly private visit" that included no official meetings.

But members of the Austrian Jewish community have raised concerns about the possible coalition government and some have urged Kurz to renounce an alliance with the FPOe.

"That the nationalist wolf is wearing a blue sheepskin (the colour of the FPOe) does not change its nature, only its appearance," said Oskar Deutsch, president of the Jewish Community (IKG) of Austria.

Source: AFP