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If you listened to the US news to hear results for the Israeli Elections….throw that all out of the window.  
They are totally wrong.  Tzipi Livni did not win the Israeli Election—Yet. Neither has Netenyahu. Israeli Politics is much more complicated than that. Once the election ends the campaigning first starts.  
As of this morning with a little more than 99% of the votes  been counted, the results look like this.
Party
(“Left”/”Right”)
Seats
Kadima (Livni)
“Left Wing”
28
Likud (Netenyahu)
“Right Wing”
27
Yisrael Beiteinu (Lieberman)
“Right Wing”
15
Labor  (Barak)
“Left Wing”
13
Shas
“Right Wing”
11
United Torah Judaism
“Right Wing”
5
Ichud Leumi (National Union)
“Right Wing”
4
Meretz
“Left Wing”
3
Hadash (Arab/Jewish party)
“Left Wing”
4
Bayit Yehudi (Jewish Home)
“Right Wing”
3
Ra’am Ta’al (Arab party)
“Left Wing”
4
Balad (Arab party)
“Left Wing”
3
“Right Wing”
65
“Left Wing”
55
Notice I labeled some parties “Right or Left Wing.” That is really a misnomer. If you lived in Israel you would most likely call Kadima, Labor, Likud and even some of the smaller parties centrist. Most of the parties in Israel support some degree of territorial compromise.
Right now one seat separates Netanyahu from Livni.  The last votes to be counted are  the military votes, they tend to be more “right wing”.  In the end this may lead to an extra Knesset seat for Netanyahu, leaving the two largest parties tied. 
Wasn’t Bibi supposed to be a clear winner? Netanyau’s seat count has been pretty stable for two weeks. While Bibi’s support stood still, Labor’s plummeted. Probably because labor voters knew that their guy, Ehud Barak had no chance and wanted to make sure Netanyahu would not be the next PM. They changed parties at the last miniature going for Tzipi Livni enabling her to barely leap frog over Bibi.
Who Will Be The Next Prime Minister? After all the votes are counted, the President of Israel (Peres) invites one of the candidates to try to form a coalition government. Usually it is the candidate with the most seats, but it doesn’t have to be so.  Peres can pick the one who he thinks would have the easiest time forming a government.  Livni couldn’t form a government after Olmert resigned and a coalition was handed to her on a silver platter. This time it will be much more difficult.
When you look at the chart above you see that the “Right wingers” have more seats 65-55 so maybe it would be easier for Netanyahu to form a government.  Not so fast.
First of all remember, the positions of most of these parties, right or left are very similar.  Think of the process of forming a government as a crazy marketplace.  Each party, even the small ones expect to gain lots of goodies (government programs and cabinet seats)  to join a coalition.
Remember all the major parties are pretty close on how to negotiate with the Palestinians. The most pressing security issue in Israel is Iran. Here too, I suspect there is little difference, but a broad coalition will be needed to attack Iran. There will be much pressure on the parties to form a unity government that includes Labor, Likud, Kadima and maybe even Yisrael Beiteinu (Lieberman).
Over the next few days you will hear various party leaders say they will or will not join a coalition. Such talk should also be ignored. Those are the political equivalent of poker faces.  They all know it is better to be part of the government than part of the opposition (that is the reason the Olmert government lasted so long.
Yisrael Beiteinu with 15 seats knows he holds a great hand.  His positions are not so radical that he couldn’t join a Kadima led government; after all he was part of the Olmert government. The once powerful Labor party would feel comfortable in a coalition government with either of the two leaders, just as long as Ehud Barak keeps the defense ministry.
The religious Shas only cares about entitlements for religious education. During the Olmert government they promised resign of Jerusalem was even discussed with the Palestinians. It was, but they were kept quiet with government programs worth around $130 Million. If they are willing to sell out Jerusalem for money, hell they will join either side for the right deal.
In a few days the horse trading will begin. Whoever he asks to lead, Peres will probably request that they try for a National Unity Government. Here are some of the possible results (at least with the major parties)
  • National Unity Government- Likud, Kadima, Labor (and one or two of the smaller parties). This will only happen if Bibi can be PM either for the entire time, or a rotation like Sharon/Peres a few years ago.
  • Likud/ Kadima/Yisrael Beiteinu- Only if Netanyahu  ends up with more seats than Kadima. This is the least possible of options.  Bibi likes to be the star, he can outshine Tzipi, but Leiberman would be a challenge especially if Livni is PM.
  • Right Wing Coalition- Honestly I don’t believe that Netanyahu wants this. Despite the campaign rhetoric, his positions have moderated.  The “right-wing” parties are flush with victory and want to push their agendas through. The Likud leader knows that this would be an impossible group to manage.
  • Most of the smaller parties would have no problem joining a government lead by either Kadima or Likud especially since their positions are so close. Some of the ultra religious parties may have a problem with Lieberman, but they can be overcome. It all depends on what they can get.
The only thing that can be guaranteed is the horse trading is just beginning. Fasten your seat belts it is going to be an interesting few weeks.

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