Everyone is prognosticating whether Israel will be able to form a government. Allow me from abroad to add my two cents.
Point #1 – The election was not about foreign policy or security, though those remain important. Rather, it was about internal Israeli policy, the economy and fairness in service to the state, young people’s inability to afford the cost of living, the huge government funds being given over to settlements and the Hareidim (ultra-Orthodox), the latter of which give nothing back in taxes or military/civilian service to the state.
Point #2 – Yair Lapid (Yesh Atid) and Naftali Bennett (Habayit HaYehudi), who surprisingly earned 19 and 11 mandates respectively, have formed a strong bond. Either they both become part of the ruling coalition or neither does, thus making Bibi Netanyahu scramble for parties (so far unsuccessfully) to join the government. Strange bedfellows when it comes to the Israeli-Palestinian issue, Lapid and Bennett agree that the economy and “sharing the burden” of military service must be addressed by the next government. Neither will join a coalition with any Hareidi party. Bibi has been unable to break them up. The Israeli public is growing in respect for both Lapid and Bennett as a result.
Point #3 – President Shimon Peres has given Bibi a two week extension to form a government. If Lapid and Bennett hold together it is my best guess that new elections will need to be called. It’s said that Bibi is heavily courting Shelly Yachimovich (Labor) to enter the government though she has refused to do so (but so did Tzipi Livni once upon a time - Tzipi and Bibi hate each other – but she made a deal anyway). If Bennett/Lapid do agree to come into the government with no ultra-Orthodox Hareidi parties, it is unclear what Livni will choose to do because her two-state interest is contrary to Bennett’s one-state position.
Point #4 – Bibi was deeply weakened in this election. His partnership with Yisrael Bateinu (Avigdor Lieberman, now under indictment) had hoped to garner 42 mandates. Instead the combined parties got 31 (20 are Likud and 11 are Yisrael Bateinu). Lapid and Bennett together hold 30 (19 and 11 respectively). According to current polls, if new elections are called Yair Lapid will earn in the mid to high 20s and will be asked to form the next government.
Point #5 – Shelly Yachimovich seriously weakened the Labor Party by her refusal to discuss the Israeli-Palestinian two-state solution and because personally she is not well-liked. Meretz (6 mandates) and Yesh Atid were the beneficiaries of disgruntled former Labor supporters. Lapid and Bennett are well-liked not only because they focused their campaigns on what the Israelis really want and need, (i.e. to clean up the economy, eliminate the disparity in government benefits going to Hareidim and the settlements, to make it obligatory for all Israelis - Hareidim included - to serve in the military or civilian service, and to clean up corruption.
Point #6 – Religious pluralism, though not the top issue of the campaign, will be affected by the government that is formed. If the ultra-Orthodox are kept out, this is very good for the Reform and Conservative movements and for secular Israeli Jews who make up 80% of the country. Civil marriage, reducing government support for ultra-Orthodox communities, granting more support for progressive religious communities (i.e. Reform and Conservative), women’s rights, civil marriage, immigrant rights, etc. will advance. Yair Lapid once wrote an article in Maariv saying that “We are all Reform Jews.” His children became b’nai mitzvah at Beit Daniel, our starship Reform synagogue of Tel Aviv and he is very close to Rabbi Meir Azari, Beit Daniel’s Rabbi.
Point #7 – The domestic issues that were the main focus of this election are now potentially in conflict with resolving the Israeli-Palestinian conflict. Vis a vis the Palestinians, Israelis have thrown up their hands. They want a two-state solution by a substantial majority (Bennett does not), but they do not really know whether the Palestinians want the same, though polls say the Palestinians too are in favor. Israelis, however, are not at all convinced that President Abbas of the PA can deliver a Palestinian state. The Israelis know that Iran remains a mortal threat, but are confident that President Obama will lead on the issue.
Conclusion – I believe Bibi will be unsuccessful in forming a new government and that new elections will be called – probably in May. If so, Yair Lapid could become Prime Minister. Of course, I could be completely wrong.
My wish for Israel is a strong and pragmatic middle of the road government without the ultra-Orthodox parties, and then real movement on both the domestic issues and a two-state resolution of the Israeli-Palestinian conflict.