Israel braced on Friday for weeks of political uncertainty and a paralysed Middle East peace process after final results confirmed the Kadima party narrowly won the election but suggested Likud is better placed to form a government.
The centrist Kadima of Foreign Minister Tzipi Livni won 28 of the 120 parliamentary seats, just one more than Likud, the right-wing party led by former premier Benjamin Netanyahu.
But Livni's narrow edge in Tuesday's vote does not guarantee her a shot at becoming prime minister. Most pundits predict Netanyahu will be the one tapped to form a government, adding that he is also guaranteed some major headaches.
Under Israeli law, the person most likely to secure majority support in parliament -- and not automatically the winner of the vote -- gets the first crack at the top job.
The task is complicated by the fact parties need only two percent of the vote to get a seat in the Knesset. This often gives clout to special interest groups such as pro-settler or ultra-orthodox religious parties.
While Netanyahu and Livni have both been holding discussions with potential coalition partners, there is talk they could form an alliance that also include the centre-left Labour party of Defence Minister Ehud Barak.
"The chances of this are still unclear, but the top members of the three parties have a fair number of supporters for the idea of forming a government based on the three center parties," the Maariv newspaper said.
This step, the newspaper added, would defuse the power of ultra-nationalist Avigdor Lieberman. His far-right Yisrael Beitenu party came in third with 15 seats, giving him the clout of a potential kingmaker.
"Netanyahu does not really want an extreme right-wing government. Judging by all the information he has, the Americans would respond severely to this and relations between Israel and the US could enter a stalemate," Maariv wrote.
A narrow right-wing government would include parties opposed to dismantling settlements and territorial concessions in peace talks and would put Netanyahu at odds with the administration of US President Barack Obama, analysts say.
The Haaretz newspaper said a Likud-led coalition with Kadima and Labour "would deprive Netanyahu of ideological zeal" but might enable him to "advance interim agreements with the Palestinians and the Syrians."
MPs from the ultra-Orthodox religious party Shas spoke in favour of including Kadima in a Likud-led coalition, saying the government would have limited survival chances if it were too far to the right, Haaretz reported.
Zvulon Orlev of the religious, ultra-nationalist Habeit Hayehudi party also expressed support for including Kadima after meeting Netanyahu on Friday.
"We told him we would like Kadima to also be part of the next government, headed by Netanyahu, out of our concern for the state of Israel and the government's stability over time," he told Ynet News.
Palestinian officials have warned that a government including far right-wing parties would bury the already hobbled US-backed peace process that was relaunched in November 2007 after a seven-year hiatus.
But several Kadima members have urged Livni not to enter into a coalition with Netanyahu, who is popularly known as Bibi, according to the mass-selling Yediot Aharonot.
"Such a government will not last even a year. Bibi wants to send us into the opposition and to dismantle Kadima, but we will dismantle him first," the newspaper quoted a Kadima MP as saying.
President Shimon Peres is due to hold talks with the parliamentary parties starting next Wednesday to decide whom to task with forming a coalition.
His decision is unlikely to come as a surprise.
"Benjamin Netanyahu will be Israel's next prime minister," Haaretz declared.
If the president does indeed ask Netanyahu to form a government, it will be the first time in Israeli history the task does not go to the leader of the party that won the most votes.
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