ROME (Reuters) - Italy’s main parties - whose agreement to revamp the electoral system collapsed on Thursday - may yet salvage a deal to reform the country’s notoriously unstable political landscape, Matteo Renzi, the head of the ruling Democratic Party said on Friday.

FILE PHOTO: Italy's Former Prime Minister Matteo Renzi speaks during a news conference in Brussels, Belgium April 28, 2017. Reuters/Eric Vidal/File Photo

But Renzi said those hopes were slim and he appeared in no hurry for early elections, saying he wanted to focus on the country’s main problems in the “coming days, weeks and months”.

Italian bonds and stocks have strengthened over the past 24 hours, with investors, fearful of political instability in the euro zone’s third largest economy, betting that the breakdown of the accord would reduce the risk of snap elections this year.

Renzi blamed the anti-system 5-Star Movement for the collapse of the pact and suggested that Italy could go to the polls using the existing voting system, with a few adjustments.

But he gave no timeframe for such a move and left the door open for further talks with the main opposition parties, including Silvio Berlusconi’s center-right Forza Italia.

“If there are the conditions so that we can draw up a nice law all together, with Forza Italia, with 5-Star; if unexpectedly people return to good sense and reason, then we will see,” he said in a webcast on his Facebook page.

“Forgive me if I am not particularly optimistic on this point,” he added.

The legislature is due to run until May 2018, but Renzi, who resigned as prime minister in December after losing a referendum on constitutional reform, has pushed behind the scenes for a snap election in an effort to regain power.

However, President Sergio Mattarella has said parliament must first draw up new voting rules because at present there is too much divergence between the systems for electing members in the upper and lower chambers.

Renzi’s PD, 5-Star, Forza Italia and the Northern League agreed last week to back a proportional representation system. The deal imploded on Thursday after the PD lost a parliamentary vote on a minor, proposed amendment.

“At this point we say, we did what was right to do for the country. 5-Star betrayed the pact,” said Renzi.

5-Star, which leads in most opinion polls, has acknowledged backing the amendment in the secret, parliamentary vote.

The row has come ahead of municipal elections in many Italian towns and cities on Sunday. Parties will look to the results to see how their support is holding up before deciding on the fate of the electoral law.