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An Israeli election official tallies votes at the Knesset in Jerusalem

Israeli voters delivered an unexpected outcome in the general election held on January 22nd. According to still preliminary results, a late surge by the new centrist Yesh Atid party saw it capture 19 seats and emerge as the second-largest grouping after Likud-Beiteinu, which secured 31 seats in the 120-member Knesset (parliament). Overall, the election resulted in a weakening of the right-wing parties, while the center-left gained ground.

The election results are not yet final, as some 250,000 votes – primarily those of the armed forces – have yet to be counted. Nevertheless, the main trends are clear. First and foremost, the merger between Likud and Yisrael Beiteinu resulted in the combined list capturing 11 fewer seats than the two parties managed separately in the previous parliament – and fewer than polls had predicted.

Partly reflecting the influence of a newly-energized young electorate – and despite the best efforts of their charismatic leaders – two other parties fell short of the exaggerated expectations created by earlier opinion polls. Jewish Home, the religious right-wing faction galvanized by its new chairman, Naftali Bennett, won 11 seats, compared with forecasts of 14 or 15, while Shelley Yachimovich, credited with reviving the Labor Party, garnered only 15 seats, far less than the 18-20 polls had predicted when the campaign began.

As against these relative failures (which in fact were significant achievements, given the starting-position of both parties), the big success story was Yesh Atid, a newly formed party led by Yair Lapid, a former media personality. Lapid will now seek to translate his success at the ballot box into cabinet seats.

“[A] more likely option… would be for Netanyahu to acknowledge the swing in public opinion and to work with Yesh Atid as his new centrist core partner.” – The  Economist Intelligence Unit

The talk about a rightward drift by the electorate proved wrong. Although Bennett boosted his party’s Knesset representation nearly fourfold, the parties of the right (Likud-Beiteinu and Jewish Home) now have three fewer seats than their predecessors in the previous Knesset, whereas the center-left parties (Yesh Atid, Labor, Hatnua, Meretz and Kadima) added four seats.

Yair Lapid, whose Yesh Atid party made a surprising showing at the election, addresses supporters in Tel Aviv January 23, 2013. (Reuters)

The strategic choice now facing the prime minister, Benjamin Netanyahu, over the coming weeks of coalition-building is whether to form a centrist government or attempt to recreate the outgoing rightist one. The more likely option – which would represent a change would be for Netanyahu to acknowledge the swing in public opinion and to work with Yesh Atid as his new centrist core partner, together perhaps with Jewish Home, but excluding the ultra-Orthodox parties.

Prospects for Israeli-Palestinian peace muted

In some ways, the outcome of Israeli elections matters little to Palestinians, as even the most left-leaning of Israeli governments have tended to advance the settlement program. The fragmented nature of the Israeli political landscape is arguably the dominant reality, often forcing prime ministers to pander to extreme minority interests, such as the settler community, to hold together coalition governments. A strong government, even from the right, might be in a better position to advance the peace process than a fragmented coalition, although any Israeli leadership would struggle to contend with the divided Palestinian polity (with Fatah ruling over the West Bank, and Hamas over the Gaza Strip).

Prime Minister Benjamin Netanyahu waves to supporters at his Likud party headquarters in Tel Aviv January 23, 2013. (Reuters)

The main wild card in the likely composition and platform of the next government will be the position of Lapid. He has not said much about the Palestinian issue and campaigned mainly on domestic issues, including challenging the privileges of the ultra-Orthodox community. This happens to put him at odds with some of the smaller parties most vociferously opposed to a two-state solution. Indeed, a spokesman for his party has called for the resumption of negotiations with the Palestinians, which, combined with the fact that Netanyahu’s own party lost ground, could encourage a slightly softer approach. However, it is worth noting that Lapid is no peacenik, symbolically launching his campaign in a West Bank settlement, and pledging to maintain Israeli control of at least the major settlement blocs as well as East Jerusalem – a view that chimes with that of Netanyahu.

Although the future composition of the Israeli government remains uncertain, the expected continuation of Netanyahu’s premiership, combined with the probable fractured nature of the next coalition, means that the prospects for the resumption of meaningful peace talks is meager at best.

This post has been authored exclusively for MEV by The Economist Intelligence Unit.

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The Economist Intelligence Unit

This post has been authored by experts of The Economist Intelligence Unit.

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