Region in Stasis As Israel Puts Its House in Order

Israel's complex electoral arithmetic often produces knotty results and until the near dead-heat between Tzipi Livni and Binyamin Netanyahu can be untangled, efforts to revive peace talks with the Palestinians - or do anything else that matters - will be effectively paralyzed.

With Livni's Kadima winning 28 seats in the 120-seat Knesset, and Netanyahu's Likud winning 27, neither of the two largest parties can rule alone, signaling prolonged coalition talks in which each will seek enough partners to form a government.

Another possible outcome is a broad national unity coalition comprising the two main parties and others. That would mean the politics of the lowest common denominator on all significant national issues.

Analysts say that in the end, Netanyahu has the better chance of becoming prime minister, as the showing by parties further to the right mean more likely allies for him.

Overall, rightwing and religious parties won a total of 64 seats, compared to 56 for center-left and Arab parties. The shift to the right is evidently linked to the inconclusive three-week war against Hamas in Gaza, and bodes ill both for prospects for negotiations with the Palestinians or Syria, and indeed for the health of Israel's fractured, dysfunctional democracy.

On the right, as widely predicted, the biggest player and possible kingmaker will be Avigdor Lieberman's Yisrael Beitenu party, third with 15 seats. Lieberman's ultranationalist platform includes the unprecedented - and to many racist - demand that Israel's 1.5 million Arab citizens take a "loyalty oath" or leave the Jewish state.

The Labour party, which ruled Israel unchallenged for the first 30 years of its existence, was reduced to a humiliating fourth place, with just 13 seats under the defence minister, Ehud Barak, the architect of Operation Cast Lead in Gaza.

The election leaves the "doves" of Israel's once vibrant peace camp in a state of disarray and despair.

The effective draw between Kadima and Likud means one possible outcome is a "rotation" of the premiership between the two large parties. In 1984, Labour's Shimon Peres and Likud's Yitzhak Shamir swapped places midway through their term.

That was the only Israeli government to almost complete its four-year tenure, though the first Palestinian intifada broke out before its end - a reminder that the status quo cannot go on indefinitely.

Palestinians will be dismayed but hardly surprised by the result. Four decades of occupation and proximity to Israel have given them a good understanding of the way things work in the democracy next door.

Mahmoud Abbas, the western-backed Palestinian president and Fatah leader in the West Bank, will despair of getting even an Israeli settlement freeze, and the easing of restrictions that have choked the economy - minimum demands - to justify to his own increasingly skeptical people the commitment to negotiate a two-state solution with Israel, along the lines agreed at the Annapolis summit, in late 2007.

But the obstacles facing the peace process on the Palestinian side are just as daunting as the deadlock in Israel. Livni and Netanyahu may in the end at least be able to agree some sort of unity coalition. Abbas and the Islamists of Hamas, who won a 2006 parliamentary election and then seized control of the Gaza Strip, remain far apart.

Now the future even of the Gaza ceasefire remains uncertain, let alone the prospects for meaningful negotiations with Israel. In both the short and longer term, the outlook is bleak on both sides of the Middle East divide.