Several issues were widely discussed in Israel during this political season. Near the top of the agenda was the high cost of housing and the growing income gap which triggered the social protests in Israel last year. Also near the top, was the issue of “Equal burden”, a key phrase which refers to making it mandatory for Ultra Orthodox to serve in the Army - like everybody else. The phrase also implies an end to the stipends paid by the government to Yeshiva Students. There were also discussion about the need to reform the Israeli electoral system to reduce the number of political parties represented in the Knesset. Another top issue was of course security, but focusing on the Iranian threat. The issue of renewed negotiations with the Palestinians was, for the first time in almost two decades, almost completely absent in the debate. What does this all mean?

 

The first thing it reflects is that most Israelis have “given up” on the peace process as it exists today. Many of them have said, on TV interviews, that “we gave Peace a chance - let the Palestinians make a move now”. This attitude reflects deep frustration by most Israelis with the Palestinian leadership and its penchant to miss opportunities once and again...and again...and again. While the issue was not widely debated, it is still a dividing line in Israeli politics.

 

While Netanyahu has endorsed the idea of a Palestinian State and a two-State solution, he is (paradoxically) in a minority in his own party. He is also constrained by the fact that the Ultra Orthodox represent an important part of his power base, and most Ultra Orthodox are opposed to territorial concessions. He is, therefore, unlikely to make the Palestinian issue a major point of his next government – unless it offers him a major political advantage. His situation is not dissimilar from the one Sharon faced when he tried to promote the idea of a Gaza disengagement. In that occasion, the outcome was the formation of a new centrist party (Kadimah) in order to redefine the political landscape, a trick that this time will not work because the center is already taken (by Yair Lapid's party).

 

The next big player is the big winner of the elections: Yossi Lapid and his centrist “Yesh Atid” (There is a Future) Party. He built his campaign on “Equal Burden”, the need to reduce the income gap and the need for Educational Reform. While he did not make the Palestinian issue part of his campaign, it is known to be an important issue for him. He would like to see negotiations restarted and Israel engaging seriously in resolving the issues. In his negotiations with Netanyahu as a possible partner in the upcoming coalition, however, insisting on this point could become an obstacle. In order to prevent alienating his Ultra Orthodox constituency, Netanyahu might be willing to concede on either “Equal Burden” or negotiations with the Palestinians, but not on both. Lapid might have to choose which issue to use as deal breaker, and since I'm a betting man I would go with “Equal Burden”. I believe he might choose to postpone the issue of negotiation with the Palestinians for a future time when his party might be stronger.

 

The third big player is Labor Party's Shelly Yacimovich. To put it succinctly, she disappointed her party. After she replaced Ehud Barak as Party leader, she raised expectations that Labor would gain many Knesset seats in upcoming elections. While Labor made progress, it was far less than anticipated. There are many reasons, but probably a very important one was that Yacimovich ruled out early in the campaign any possibility of joining a Likud led government; this when most commentators were anticipating that Netanyahu would win. She made the social agenda the center of her campaign, competing in that regard with Yossi Lapid for votes. But while Yacimovich put herself out of a future coalition with Likud, Lapid did not. Many Israelis decided to go with the party most likely to influence the politics of a future Netanyahu administration. In sum, we can say Yacimovich shot herself in the foot.

 

Another big winner in the elections was the Baiyt HaYehudi (Jewish Home) party led by Naftali Bennett. Bennett is extremely conservative in economic and social issues, and believes in the annexation of Judea and Samaria, and he is adamantly opposed to Palestinian Statehood. Not surprisingly, his party became the home of the activist segments of the Settlers' population. Inclusion of Bennett's Party in any future coalition would rule out completely any compromise with the Palestinians.

 

The Ultra Orthodox parties Shas (11 seats) and United Torah Judaism (7) have a strong Social Welfare focus, reflecting the concerns of their constituency. While both parties would be willing to serve in a coalition seeking a compromise with the Palestinians, they would do so at the price of preventing the passage of any legislation that would make it mandatory for Ultra Orthodox to serve in the Army. Nothing less would buy their silence, and nothing would buy their agreement. Sooner or later, these parties would have to oppose territorial concessions if they are to survive as viable political parties.

 

Based on his prior track record, we can confidently say that Netanyahu does not like to be in a political fringe of a coalition. He tries to build coalitions with some parties to his right and some parties to his left; in this way he can make his own agenda the compromise agenda. In one possible scenario, Netanyahu (31 seats at his command) might choose to call on Bennett (11 seats) and Lapid (19 seats), forming a core coalition commanding 61 votes. This, however, would make the coalition rather unstable and to some extent force Bennett's agenda on the government because he would be in a position to “pull the plug” and force new elections. While Netanyahu might try to bring in HaTnuah (the party of former minister Tzipi Livni) to try to balance the scales with her 6 votes, Livni's positions on the Palestinian issue might make the coalition even more volatile.

 

He can choose instead to go with the old alignments and bring together Labor, the Orthodox and Likud under a coalition. This coalition could only work on social welfare and economic issues, and the traditional relationships between these parties would make any change in the status quo of Ultra Orthodox recruitment in the military highly unlikely. As for the Palestinian issue, it would probably occupy a very low place in the government's agenda. To top it all off, it would only play at the hands of Lapid, since his exclusion from a future coalition would probably transform him into the most popular politician in Israel. And Netanyahu needs Lapid.

 

Should Netanyahu choose instead to call on Lapid's Yesh Atid (19 seats), Yacimovich's Labor Party (15 seats) and Tzipi Livni's HaTnuah (6 seats), it would give him a margin of 71 votes in the Knesset, making the government a stable one. This configuration of forces, however, would leave Netanyahu to the right of all his coalition partners, a position that makes him very uncomfortable and will probably force him to compromise on issues which could cost him internal support in his own party. This coalition, without any of the Ultra Orthodox parties, could easily pass legislation on Ultra Orthodox military service, but at a steep political cost for Netanyahu personally – not to mention the fact that Yossi Lapid could become the king maker in such a government reducing Netanyahu's room for political maneuvers.

 

Whatever coalition Netanyahu chooses to put together (and there are other possibilities in addition to the ones I described), one issue is for sure: he will have to modify his political game. Israel is facing a worrisome political and security situation in the region; this will force Netanyahu to seek a closer relationship with Washington. While such a rapprochement would also be to Obama's benefit it will require more flexibility on the Israeli side. To have that flexibility, he will need the parties to his left, but to retain his political strength he needs those to his right. Netanyahu needs a strong government to be able to get Washington to consider him a reliable partner, but to gain that strength he might need to compromise his historical alliances and make a leap of faith by forming new alliances.

 

However we look at it, Israel is currently at a political crossroads and the next government might very well define the future direction of the Jewish State. And as usual whenever we talk about Israel, what holds today as true, will change tomorrow. Stay tuned...