MADRID (Reuters) - Spain's liberal party Ciudadanos ("Citizens") on Thursday said it was ready to take part in a three-way government with the conservatives and the socialists in a bid to unblock Spain's seven-month political stalemate.

The party's leader, Albert Rivera, who met the king on Thursday, said conservative caretaker Prime Minister Mariano Rajoy should step aside if needed to make a deal possible.

Rivera also said that an alternative solution if a three-way agreement could not found would be for other parties to abstain to allow a minority government of Rajoy's People's Party.

"There are two options: a strong government built on consensus or a minority government of the party with the most votes," Rivera told journalists.

Ciudadanos finished fourth in a June 26 general election, which like a previous ballot held in December produced a hung parliament.

(Reporting by Julien Toyer and Carlos Ruano; Editing by Sarah White)