Israeli Elections and Netanyahu's Tight Spot

Tuesday is election day in Israel.

It is likely to be a watershed moment.

You may remember that Prime Minister Netanyahu called early elections a couple of months ago shortly after entering into a surprise coalition agreement with the centrist Kadima party.

I was quite surprised when he called snap elections because I assumed that with the comfortable majority Likud-Ysrael Beiteinu and Kadima enjoyed in the Knesset, he had everything he needed to start a peace process with Palestinians.

The early elections decision indicated that Netahyahu had another scenario in mind. He felt that he did not need Kadima because he could move to the center any time he needed, as the space to Likud's right was solidly occupied by his buddy Avigdor Lieberman's Ysrael Beiteinu party.

He must have checked with Arthur Finkelstein, his American campaign manager and Finkelstein's polling at the time gave Likud-Beiteinu a combined 45 seats and maybe more (currently they have 42 seats out of 120 in the Knesset).

I suspect he figured that he could always get a much weakened post-election Kadima involved if he needed more support and he could convince other centrist forces to join his coalition to reduce his dependence on religious parties. And sure enough, right about then, Tzipi Livni, a former Minister of Foreign Affairs and one of the most respected politicians in Israel decided to make a political comeback and formed a new party in November called Hatnuah. With dissidents from Kadima she now has 7 seats in the Knesset.

All in all, Netanyahu must have envisaged that this new coalition would be durable and strong enough for him to start a peace process with Palestinians. (As I mentioned throughout, I am not attributing this goal to him as something he cherishes: it is a major goal for the US and a critical necessity in the newly "sprung" Arab World). After all, Lieberman has nowhere to go with a pending indictment and he will do as he is told. Tzipi Livni or other centrist parties are interested in a two-state solution and would toe the party line, so to speak.

But his calculations proved to be wrong dramatically.



Enter Bennett

Naftali Bennett, a very affluent and charismatic businessman became the chairman of the Bayit Yehudi (Jewish Home) party. Bayit Yehudi was created in 2008 with the merger of three religious parties and currently it has just 3 seats in the Knesset.

However, after Bennett took the helm, the party rose meteorically and is now poised to win roughly 16 seats. Controversially, he wants to annex 60 percent of West Bank; to take the two-state solution off the table; to give Palestinians some unspecified autonomy in reservation-like enclaves. And rather tellingly, he wants to fix the economy by getting rid of the unions, as he feels they are killing the Israeli economy:

"If there is one thing I would want to achieve over the next four years, it is to break up the monopolies here and to break the stranglehold the big unions have on the Israeli economy. I think it's a sin that most Israelis can barely [afford to] live here."

With his conservative rhetoric, Naftali Bennett successfully grabbed a large chunk of the political space to Netanyahu's right. And with it many of his projected seats. The combined Likud-Beiteinu seats are now predicted to be 32 (and the combined Likud-Haredi bloc is 63 seats). That is a major drop.

On the other side the center-left-Arab bloc is up and they could get 57 seats. If that happens it could open up new possibilities.

But overall this is a difficult situation for Netanyahu. If he moves to the right, he will be competing with Bennett, a young, charismatic, high tech millionaire who served in an elite military unit. He is the Israeli success story.

Bennett's rapid rise indicates that Netanyahu cannot appear more pro-settler or tough guy than Bennett himself. There are no seats to be gained from the right.

Plus, going there would box him in a very narrow framework. Already his tough guy comments in the last few days about maintaining all settlements are likely to come back to haunt him if he needs to form a larger coalition with some of the center-left parties.

His only play is to try to act like the elder statesman who advocate unity behind Likud for the greater good of Israel. In the process, he wants to frame Likud as just conservative enough without the dangerous extremism of ultra-conservative parties like Bayit Yehudi. That is not easy to do in the current political climate.

One way of achieving this was to anonymously leak a video of a Bayit Yehudi candidate (US-born Jeremy Gimpel) suggesting to blow up of the Rock of Dome and to erect a third Jewish temple in its place.

The leak had two aims. One was to convince the 15% of the electorate who hadn't made up their mind as of last week, that Bayit Yehudi is a dangerous and extremist political formation. The other (and lesser goal) was to force left and center parties to denounce Bayit Yehudi as to prevent them contemplating any post election collaboration against Likud-Beiteinu.

So what are the likely outcome of these elections?

15 percent undecided is a big chunk of vote. If their support is distributed proportionally, the current projected seat distribution will not be affected. The right will still get 60-65 seats and the left will get 53-57 seats.

In that case, Netanyahu will have two choices.

Either he will move to the right and form an ultra-conservative coalition and govern like Bennett. This would mean no peace process, a renewed radicalization of Hamas, a probable Third Intifada and deteriorating relations with the US and Egypt and Jordan. With Syria about to implode, this could bring Lebanon and Hezbollah back into the equation. And Israel's security could be threatened from all sides.

And worst of all, Palestinians may just give up any settlement idea. Abbas told Ha'aretz that after the elections if there is no peace initiative he would simply disband the Palestinian Authority:

Abbas, in an interview with the Israeli daily Haaretz, said that if such a situation arose he would hand full responsibility for the occupied West Bank to the Israeli government. 

"If there is no progress even after the election I will take the phone and call (Prime Minister Benjamin) Netanyahu," Abbas said. 

"I'll tell him... Sit in the chair here instead of me, take the keys, and you will be responsible for the Palestinian Authority."

Or Netanyahu could decide to form a national unity government with most of the left-center parties and Likud-Beiteinu. This could dramatically reduce the power and leverage of pro-settler parties including Bayit Yehudi. A peace process with both Abbas and Meshaal could resolve security issues and stabilize the region. It might generate a lot of good will in Egypt and it would placate the Obama administration.

If the undecided support moves disproportionally to the left, this scenario becomes a more likely one.

Conversely, if the same support moves disproportionally to the right, it could become difficult for someone like Netanyahu to negotiate with Shelly Yachimovich and Tzipi Livni to form a coalition goverment with them.

In that case, he might form an ultra-conservative government, perhaps even including Bayit Yehudi.

That would constitute crossing the Rubicon in terms of the two-state solution.

As I mentioned before, demographically speaking, the State of Israel will stop being the Jewish State in a little more than a decade's time.

At which point, they will have a range of equally unpalatable choices. (a) Massive deportation of Palestinians; (b) enclose them in special enclaves and give them secondary citizen status with no voting rights; (c) accept a Palestinian government to rule Israel.

Since the last option will never come to pass, in a decade's time Israel could be forced into the most bitter irony in history.

However, I remain optimistic. I assume that if my starting hypothesis is valid, a national unity government should emerge out of these elections. Or to put it more accurately, whatever government emerges out of these elections will have to start a peace process and negotiate in earnest

With Middle East in serious upheaval, anything else would make the regional situation extremely chaotic and dangerous. This is something the United States cannot afford to allow at this point in time.

And with all due respect to the internal dynamics of Israeli politics, the US can be very persuasive when they need to be.