Ronen Zvulun / Reuters

Israeli Prime Minister Benjamin Netanyahu signed his first coalition partner in centrist Tzipi Livni, a move that could get a nod of approval from peace activists and U.S. President Barack Obama. But how cohesive any message of peace will be depends largely on the makeup of the rest of the coalition.

News analysis

TEL AVIV -- In the Middle Eastern bazaar, the first sale of the day is prized beyond any other. It is called the “siftach,” and to clinch the deal the seller gives a discount to the buyer, to launch a good day’s business.

In the case of the agreement announced Wednesday between Likud Beitenu leader Benjamin Netanyahu and Tzipi Livni, leader of  “Hatnua” (Movement) to join a coalition government, Netanyahu was desperate to get one of the several political parties he is negotiating with to be the first to reach agreement.

So to entice Livni to sign, he sweetened his offer to include what Livni dearly wanted: the role of chief peace negotiator with the Palestinians, in addition to the guarantee of the post of justice minister for her and the post of minister of the environment for another member of her party.

Her brief in a new Netanyahu government, then, would be to launch a new peace process with the Palestinians, according to the published agreement, “with the aim of reaching a settlement with them that will put an end to the conflict.”

The significance of this is that the responsibility passes from the foreign minister, who loudly proclaimed that he did not believe in peace with the Palestinians, to Livni, who does.

In addition to being the first step toward forming Netanyahu’s third government, it allows him to send a signal to U.S. President Barack Obama, expected in Israel on his first state visit next month, that he is serious about moving toward peace and that Obama should support him; Netanyahu’s relationship with Obama is famously fraught.

What this means in practice, however, is far from clear. It depends on who else joins Netanyahu and Livni in building a coalition government. Pundits expect Netanyahu to focus his attention next on the Labor party, as well as a couple of the religious Jewish parties, and only then to go for broke -- to offer a role to the two young newcomers, one on the left and one on the right, who have surprisingly found common cause.

The question: Can Netanyau pull off a brilliant ploy and form a government without the second- and third-largest parties, Yair Lapid’s ‘Yesh Atid’ (There is a Future) and Naftali Bennett’s Bait Hayehudi (Jewish Home)?

Or is it so brilliant? When the voters speak clearly and give the second- and third-largest number of votes to two new parties with new leaders and a large majority of new members of parliament, shouldn’t this call for change be reflected in any new government?

The problem is, and this brings us back to Livni’s role as peace negotiator, Bennett and Lapid, who agree on many social and economic issues, could not be further apart on the central question: What about the Palestinians? Bennett is absolutely clear: No Palestinian state. Lapid is with Livni.

So is there a real change in the Israeli government’s position vis a vis peace talks? As always, Netanyahu is hard to read. Does he really want Livni to take Israel down the road to compromise and peace? Or does he just want to form a new government so badly that he will offer any enticement to make it happen?

Cynics argue the latter. Some others believe that maybe a miracle is at hand.

And as Israel’s first president, David Ben Gurion, once said: To be a pragmatist in Israel, you have to believe in miracles.

Martin Fletcher is the author of "The List," "Breaking News" and "Walking Israel."

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This story was originally published on Thu Feb 21, 2013 4:42 AM EST

Nir Elias / Reuters

Israeli Prime Minister Benjamin Netanyahu leaves the Likud-Yisrael Beitenu headquarters in Tel Aviv on Wednesday.

A badly weakened Prime Minister Benjamin Netanyahu scrambled Wednesday to keep his job by extending his hand to a new centrist party that advocates a more earnest push on peacemaking with the Palestinians after Israel's parliamentary election produced a stunning deadlock.

The results defied forecasts that Israel's next government would veer sharply to the right at a time when the country faces mounting international isolation, growing economic problems and regional turbulence. While that opens the door to unexpected movement on peace efforts, a coalition joining parties with dramatically divergent views on peacemaking, the economy and the military draft could just as easily be headed for gridlock — and perhaps a short life.

Israeli media said that with nearly all votes counted, each bloc had 60 of parliament's 120 seats. Commentators said Netanyahu, who called early elections three months ago expecting easy victory, would be tapped to form the next government because the rival camp drew 12 of its 60 seats from Arab parties that traditionally are excluded from coalition building.

Ammar Awad / Reuters

Yair Lapid, leader of the Yesh Atid (There is a Future) party, addresses supporters at his party's headquarters in Tel Aviv on Wednesday. The surprise star of Israel's election is a former television news anchor whose centrist party soared to second place in the balloting.

A surprising, strong showing by a political newcomer, the centrist Yesh Atid, or There is a Future, party, in Tuesday's vote turned pre-election forecasts on their heads and dealt a setback to Netanyahu. Yesh Atid's leader, Yair Lapid, has said he would join a government only if it were committed to sweeping economic changes and a serious push to resume peace talks with the Palestinians, which have languished throughout Netanyahu's four-year tenure.

The results were not official, and the final bloc breakdowns could shift before the central elections committee finishes its tally early Thursday. With the blocs so evenly divided, there remains a remote possibility that Netanyahu would not form the next government, even though both he and Lapid have called for the creation of a broad coalition.

How Israeli elections work
Under Israel's parliamentary system, voters cast ballots for parties, not individual candidates. Because no party throughout Israel's 64-year history has ever won an outright majority of parliamentary seats, the country has always been governed by coalitions.

Traditionally, the party that wins the largest number of seats is given the first chance to form a governing alliance in negotiations that center around promising Cabinet posts and policy concessions. If those negotiations are successful, the leader of that party becomes prime minister. If not, the task falls to a smaller faction. President Shimon Peres has until mid-February to set that process in motion.

Netanyahu's Likud-Yisrael Beitenu alliance polled strongest in Tuesday's election, winning 31 parliamentary seats. But that is 11 fewer than the 42 it held in the outgoing parliament and below the forecasts of 32 to 37 in recent polls. Yesh Atid had been projected to capture about a dozen seats but won 19, making it the second-largest in the legislature.

Addressing his supporters early Wednesday, when an earlier vote count gave his bloc a shaky, one-seat parliamentary margin, Netanyahu vowed to form as broad a coalition as possible. Lapid also called for the formation of a broad government.

The goal will not be an easy one, however, and will force Netanyahu to make some difficult decisions. In an interview last week with The Associated Press, Lapid said he would not be a "fig leaf" for a hard-line agenda on peacemaking.

That stance could force Netanyahu to promise overtures to get peace negotiations moving again.

But a harder line taken by traditional and future hawkish allies could present formidable obstacles to coalition building.

Tensions with the United States, Israel's most important ally, also may have factored into the shift to Lapid. President Barack Obama was quoted last week as saying that Netanyahu was undermining Israel's own interests by continuing to build Jewish settlements on occupied lands the Palestinians want for a future state.

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