UPDATE 1-Spain's Socialists and Podemos reach preliminary post-election deal - source

Spain's Socialists of acting Prime Minister Pedro Sanchez have reached a preliminary post-election agreement with far-left party Unidas Podemos, a Socialist source told Reuters on Tuesday without giving any details.

Sunday's election - the country's fourth in four years - left Spain's parliament even more fragmented than a previous ballot in April, with the Socialists in the lead but further away from a majority. La Vanguardia newspaper said that the preliminary deal between the two parties focused on a coalition government. If confirmed, this would be Spain's first coalition government since the country's return to democracy.

However, the combination of the 120 seats obtained by the Socialists and the 35 of Unidas Podemos would not be enough on its own to secure a majority to govern in the 350-seat parliament and they would need to find more allies. Sanchez and Unidas Podemos leader Pablo Iglesias will meet at 13h45 (1245 GMT), the Socialist party said in a statement. A joint declaration will follow.

The two parties had tried and failed to strike a government deal after the April election, which had prompted Sanchez to call the repeat election.