Coalition Options in Israel

The Israeli political system was thrown into turmoil yesterday, with voters bucking projections and making the parliamentary elections closer than anticipated. As the results continue to come in, Prime Minister Binyamin Netanyahu is virtually certain to win a third term and form the next government, but late returns suggest that the right and center-left blocs could wind up with 60 seats each in the 120-member Knesset. Whatever the case, the outcome will present Netanyahu with several different options once he begins the now-thornier process of forming Israel's next government.

NETANYAHU DROPS, LAPID RISES

Some loose ends remain to be tied before the election is officially over -- the results will not be formally submitted until January 30, and the votes of historically right-leaning Israeli soldiers have yet to be counted. If Netanyahu prevails, he will have six weeks to put together a new government. Yet the potential shape of that government may be very different than what he envisioned in recent months.

When Netanyahu merged his Likud Party with Avigdor Liberman's Yisrael Beitenu Party in October, they were projected to win a total of 42 seats. On election day, however, that figure shrank to 31. Several factors contributed to this downturn. Some Israelis who traditionally voted Likud did not want to support Beitenu given that Liberman is under indictment for fraud and breach of trust. Moreover, the joint list produced by the merger pushed out three prominent Likud members known for their commitment to the rule of law and aversion to extremism: Dan Meridor, Benny Begin, and Michael Eitan. They were not replaced by figures of comparable public appeal.

Beyond the merger, the biggest weakness of Netanyahu's campaign was his blatant decision to avoid saying anything of policy relevance regarding heavyweight foreign policy issues -- namely, the Iranian nuclear program, relations with the Muslim Brotherhood government in Egypt, the government's future posture toward Gaza, and alternatives if the two-state solution does not occur. Nor did he address the social protest movement that brought 400,000 Israelis into the street in 2011, and which served as the centerpiece for Yair Lapid's Yesh Atid Party and Labor. He also ignored wide public support for extending mandatory military service to ultraorthodox Jews, no doubt hoping to avoid alienating a base that has been loyal to him. Moreover, the sense that a Netanyahu victory was inevitable led some Likud supporters to believe they could spare their vote on a boutique party. Taken together, these factors made many believe Netanyahu was talking down to the public.

The prime minister's relatively poor finish reflects the rise of domestic issues as a galvanizing political force. Those were the issues championed by Lapid, a newspaper columnist and talk show host whose party won a surprising 19 seats, making him a kingmaker. Labor came in third with 15 seats.

Lapid's theme was that the middle class disproportionately shoulders the country's tax burden and military service requirements. This idea resonated in the greater Tel Aviv area, where he finished first by seemingly capturing most of the demographic that voted for the Kadima Party in 2009. People liked his "good government," nonpolarizing approach focusing on quality-of-life issues. Yair's ideas further resonate because people remember his father, Tommy Lapid, a Holocaust survivor, commentator, and parliamentarian who refused to let his party sit in government with ultraorthodox factions until they agreed to be conscripted like all other Israelis. Indeed, the last time ultraorthodox parties sat in the opposition was a decade ago.

The elder Lapid's moment came during the second Palestinian intifada, when Israelis believed that the only opening for change was on the domestic front. Similarly, this year's election marks what Israelis consider a bleak regional landscape, leading many to vote based on domestic issues. Even Labor reoriented its campaign away from its traditional peace emphasis, instead focusing on the economic burden of workers. Nevertheless, some of Yair Lapid's rapid rise over the past few weeks came at Labor's expense, after party leader Shelly Yachimovich ruled out joining a Netanyahu government. Expecting a Netanyahu victory, some voters apparently decided that going with Labor would mean relinquishing any chance of influencing the next government from the inside.

COALITION OPTIONS

Although his right-wing bloc has lost almost a quarter of its seats since October and stands to win, at best, a very narrow majority of 31 seats, Netanyahu will almost certainly be the next prime minister. Today, Lapid publicly declared that he does not view himself as a candidate for the post because it would mean forming a coalition with Arab Israeli parties that do not recognize Israel's character as a Jewish state.

In his postelection speech declaring victory, Netanyahu said he favored "the broadest coalition possible." Indeed, any narrow coalition would produce a short-lived government, and early elections would be inevitable. After meeting with Liberman today, Netanyahu indicated that he favored a government focused on "burden-sharing" -- a code word for putting the ultraorthodox in a compulsory service program. He also said he wanted to improve affordable housing and change Israel's system of government. Factoring in these and other factors, the three most likely coalition options are described below.

OPTION 1: NETANYAHU GOES SECULAR (71 SEATS)

Netanyahu could attempt to mirror the approach taken a decade ago by Ariel Sharon, who kept the ultraorthodox out of his government in favor of Tommy Lapid. Such a secular government would include Likud-Beitenu (31 seats), Yair Lapid's faction (19), Labor (15), and the party of former foreign minister Tzipi Livni (6). In this scenario, Lapid could decide to become education minister instead of accepting offers to serve as foreign minister or the honorific post of deputy prime minister. He promised voters that he would pursue the education portfolio -- an important consideration given that the public often shuns third parties that do not deliver on their campaign pledges. As for Labor, Yachimovich expressed disappointment that she did not do better in the election. She also mentioned advancing peace and did not close the door on joining the government as she has in the past, though she still seemed dubious.

In theory, this coalition would enable the government to pass a law mandating ultraorthodox public service, whether civilian or military. This would be out of character for Netanyahu, and the uproar among that constituency would be immense. Netanyahu views the ultraorthodox as integral to his base and already sacrificed a wider, short-lived government last summer because he did not want to offend them on the draft issue. Even so, the outcome of the election suggests that this initiative is what much of the public wants. Whatever the case, if Netanyahu established such a coalition, he would want to make sure that the other parties could not outvote him in the cabinet.

OPTION 2: FOCUSING ON THE ULTRAORTHODOX (69 SEATS)

To avoid inflaming the ultraorthodox, Netanyahu could form a coalition similar to option 1, but replacing Labor with Naftali Bennett's far-right Habayit Hayehudi (Jewish Home) list, which won 11 seats. Yet he would still need Livni's faction; otherwise his coalition would hold only 61 seats, allowing any parliamentarian in the bloc to potentially bring down the new government. Gaining the necessary breathing room would likely require him to enlist Lapid's help in persuading Livni to join as foreign minister. And the coalition would be even more secure if Shaul Mofaz's greatly reduced Kadima Party manages to teeter over the parliamentary threshold with 2 seats (interestingly, the combination of Lapid, Livni, and Mofaz would equal 27 seats, nearly replicating the Kadima base's tally of 28 seats in 2009). These maneuvers would give Netanyahu what he seems to want -- to be at the center of his government, not the edge. Yet Bennett would still be able to pull the plug on the government if Livni moved too far ahead on the Palestinian issue, one of her main campaign platforms.

OPTION 3: SOCIAL WELFARE FOCUS (64 SEATS)

One of the leaders of the ultraorthodox Shas Party, Aryeh Deri, has publicly called for Netanyahu to form a government with Labor and the ultraorthodox. A coalition based on that approach would presumably include Likud-Beitenu (31), Labor (15), Shas (11), and United Torah Judaism (7). Both Labor and the ultraorthodox are most focused on social welfare. This arrangement would also have the advantage of keeping Lapid out of the government, so the enlistment issue would not be a primary focus. Again, though, Labor has previously ruled out joining a Likud government, and Yachimovich remains dubious. Moreover, there could be uproar in secular quarters over the exclusion of Lapid, with whom Netanyahu has already publicly declared he wants to work.

IMPLICATIONS FOR THE UNITED STATES

Washington will naturally be constrained from making any direct public statements about its preferences, falling back on the position that the United States will work with any government committed to preserving close bilateral relations and advancing the cause of peace. Ideally, it wants to see a broad-based government that gives Netanyahu maximum room on the Palestinian issue; it is therefore quietly glad that the size of the right-wing bloc has hit a limit. At a time when Israel is frequently asking the United States to intercede with Egypt on its behalf, Washington is no doubt hoping for a government that makes such mediation easier amid ongoing regional turmoil.

David Makovsky is the Ziegler distinguished fellow and director of the Project on the Middle East Peace Process at The Washington Institute.