A political frenzy was underway in Israel Wednesday, following a tight election that resulted in a razor-thin, one-seat difference between the two leading parties.
According to nearly complete results, Tzipi Livni's centrist Kadima party won 28 of Israel's 120-seat parliament, while hardliner Benjamin Netanyahu's Likud party took 27. But the tally did not include thousands of votes by soldiers, which are to be counted by Thursday evening.
The close finish means both will be fighting to build alliances and establish a coalition that will have the ability to govern. Some are saying that process could take weeks.
Already, Netanyahu has met with the head of the ultra-Orthodox Shas faction. Livni, who hopes to become Israel's second-ever female prime minister, has met with Avigdor Lieberman, whose ultranationalist party received 15 seats and emerged as the third-largest force in parliament.
But Lieberman's hard-line and divisive anti-Arab stance could make it difficult, if not impossible, to come to a working agreement with Livni. For example, though about 20 per cent of Israel's seven million citizens are Arabs, Lieberman says he wants to redraw Israel's borders in order to push out the heavily Arab areas.
"This poses a very big problem for Tzipi Livni because in order to become prime minister, in order to govern, she will need to reach out to the right wing in order to bring those parties into her coalition," CTV's Middle East Bureau Chief Janis Mackey Frayer told Canada AM.
Because right-wing parties won a majority of the votes, Netanyahu may have a better chance than Livni of forming a coalition with his natural allies.
"What needs to happen is Shimon Peres, the Israeli president, must extend the invitation or the request to somebody to form a coalition government," says Mackey Frayer.
"Now, traditionally, that invitation has always gone to the person who won the most seats, but there are many politicians on the right who believe it should be Netanyahu and not Livni."
Livni believes Israel must make land concessions with the Palestinians as a means of brokering lasting peace. Lieberman and his supporters disagree with the notion of making concessions.
As coalition negotiations begin, observers are predicting a number of outcomes. One option would see a hard-line government led by Netanyahu that would leave Livni in the opposition. Another option would be some form of accommodation between the two in the form of a centrist coalition in which they would share power.
On Tuesday night as the results were coming in, both Livni and Netanyahu declared a victory of sorts.
In a post-election speech, Netanyahu said he was proud with the gains his party had made and that "with God's help" he would be named as Israel's prime minister for a second time. He previously served as prime minister a decade ago.
"With God's help, I will lead the next government," Netanyahu told supporters. "The national camp, led by the Likud, has won a clear advantage."
Livni, however, gave no sign that she felt she would not lead the new government.
"Today, the people choose Kadima...we will form the next government led by Kadima," she said.
Meanwhile, the government is frozen in a state of paralysis that could hurt the prospects for Egyptian-led peace efforts. The Egyptians have been trying to broker a truce between Israel and Gaza's militant Hamas leaders following last month's fighting.
Hamas may be hesitant to sign a deal that could be overturned by a new coalition government.
