Israel's election results are likely to be certified in the next 24 hours. The outcome leaves Prime Minister Binyamin Netanyahu with a number of options for coalition formation over the next 28 days or so. As negotiations between Likud and other parties plays out, three important points should frame analysis of the process.
First, Netanyahu's victory is not a death knell for anything. Netanyahu's victory creates important changes to the status quo but not nearly enough to justify leftist sensationalism about the death of the peace process. True, he made comments this weekend eschewing a Palestinian state (which he has now backed away from). Additionally, his absurd warning that the "Arabs are voting" are both shocking and unbecoming of a pluralistic democratic state like Israel. However, there are few entities who can keep these comments salient in the media cycle for more than a few weeks - enough time to matter. Bibi's new coalition will look similar to the current one, consisting of centrist and rightist religious Zionist parties. This is not a game changer. While the status quo is unsustainable, Netanyahu's victory and the policy rhetoric which was largely smoke and mirrors have not sealed Israeli or Palestinian fates. Once the coalition is formed and an actual agenda outlined, analysts will be much better able to assess the future of Israeli policy.
Second, the elections consolidated an opposition to Bibi Netanyahu. The major elements of this opposition are centrist parties, the Arab parties, and Labor. In 2013, Yair Lapid's Yesh Atid party was an anomaly. Now it is not only the fourth largest party in terms of seats, but it is joined by Moshe Kahlon's centrist Kulanu party. In addition, the Zionist Camp's final tally was likely boosted by the participation of Tzipi Livni whose constituency was the centrist Kadima party. Centrist parties are divided but together they have a meaningful constituency among Israelis. The United Arab List has also made an impressive showing with 13 seats despite cynicism about politics from Israel's Arab population. Additionally, the elections showed with certainty that the Labor party remains a major player in Israeli politics. After the 2013 elections, some wondered whether Labor's consistently poor showing in elections compared to other parties signaled the death of the party. As opposed to four months ago, Labor will be leading a real opposition to Prime Minister Netanyahu, a price which is not trivial.
Finally Washington's response to Bibi's win was clouded by wishful thinking. While the extent of Netanyahu's victory (6 seats) is a surprise that will generate many analyses in the coming weeks, the fact that he won re-election was the predicted outcome from the beginning (see here and here). Analysts in DC had hoped that a Zionist Camp win could unseat Bibi and bring about positive change in the damaged US-Israel relationship. Ironically, the Obama administration's curmudgeonly response to Netanyahu's win is actively hurting US-Israel relations. The administration's open disdain for Netanyahu is receiving extensive media attention in a way that harms its ability to influence leadership in Jerusalem. A better strategy would be for Obama to extend neutral post-election formalities, letting Netanyahu make the first post-election overture, while administration members highlight the social welfare issues important to many opposition voters during Netanyahu's coalition formation process.