Former New York City Mayor Rudy Giuliani has reportedly ruled out a bid for governor next year but has expressed interest in running for U.S. Senate, according to published reports.

"In the next 48 hours he will announce that he will not run for governor, but will run for the Senate," a source familiar with Giuliani and his failed presidential campaign told the New York Daily News.

The source told the newspaper Giuliani will square off against Democratic Sen. Kirsten Gillibrand in 2010 to battle it out for the last two remaining years of Hilary Clinton's term.

If elected, he reportedly will use it as a stepping stone to make a Presidential bid in 2012 and wold not run for re-election to the Senate.

Maria Comella, a spokeswoman for Giuliani, said in a statement, "Rudy has a history of making up his own mind and has no problem speaking it. When Mayor Giuliani makes a decision about serving in public office, he will inform New Yorkers on his own."

A hypothetical matchup in the Senate race, shows that Giuliani would beat Sen. Gillibrand. However, the polls also indicate that Giuliani would lose to New York attorney general Andrew Cuomo.

Despite low poll numbers and mounting pressure from Democrats urging him to drop out, New York Gov. David Paterson said he intends to run for governor in 2010.

Some Democrats are throwing their support to Cuomo who had a 69% job approval rating in a September poll.