Global Insight Perspective

Significance

Although it was not the political earthquake that many had forecast, the Kadima victory nevertheless has significantly altered the Israeli political landscape. The focus now shifts towards establishing a coalition government that conforms to Kadima's 'disengagement' programme.

Implications

Having won less than a quarter of parliamentary seats, Kadima will be forced into moderating its strictly 'unilateralist' programme with respect to the Palestinians, given the party's reliance on the second-placed Labour party in any future coalition government. However, the election results reveal a strong shift to the centre ground among the Israeli electorate, with the right-wing Likud party in particular suffering its worst ever defeat.

Outlook

With a jubilant Labour party claiming second spot, Israel's burgeoning social and economic 'crisis' is similarly expected to attract greater governmental attention. While the Kadima strategy will inevitably revolve around establishing Israel's permanent borders with respect to the Palestinians, a coalition with Labour will demand stronger domestic economic compromises and an emphasis on social justice.

Unsurprising yet Unconvincing Victory

Barely four months since being established, the Kadima alliance under Acting Prime Minister Ehud Olmert can finally claim to have broken Israel's longstanding political taboo. Never before has a third party defeated the two dominant Labour and Likud political blocs in an election. While rightly celebrating its hard-fought victory, the party's leadership will also reflect on the result as one that could have offered Kadima a little more leeway. Although coalition governments are the order of the day in Israel, and this election was never expected to upset that order, pre-election estimates of a convincing Kadima victory failed to materialise. Olmert will now find his premiership constrained by the usual pressures of cross-party goodwill and compromise.

With 99% of the votes counted from a record-low voter turnout, Kadima was set to emerge as the largest party with 28 seats in the 120-member parliament. Kadima received 21.8% of the vote, but the party's seat allocation could still change depending on the final result. The opposition Labour party under former union boss Amir Peretz was expected to take 20 seats, with 15.1% of the vote. However, most surprisingly - and at least partly a result of Kadima's initial breakaway - the once-powerful Likud party suffered its most humiliating defeat, being pushed into fifth place with just 11 seats. The ultra-Orthodox Shas party enjoyed a resurgence with 13 seats. The extreme right-wing Yisrael Beitenu, which campaigned on an anti-Arab ticket, claimed 12 seats. The newly formed Pensioners List, which is believed to have attracted a significant number of disgruntled Labour supporters, claimed an ultimate election surprise with a seven-seat win. 

No Clear Mandate

Olmert's victory speech to his party members was not simply one of elation. The premier vowed to implement his explicitly defined programme to establish Israel's borders by 2010, a policy that would be carried through with or without Palestinian backing. However, having formerly dismissed the idea of negotiations with the Palestinians, Olmert did sound a little more accommodating over talks with Palestinian President Mahmoud Abbas. The small strategic shift is indicative of the position in which Kadima now finds itself. 'We will strive to bring about the establishment of the final borders of Israel as a Jewish state with a permanent Jewish majority and as a democratic country', Olmert said. 'We will do this through negotiations, through an agreement with our Palestinian neighbours...There is no good alternative to a peace agreement'. Given that Kadima failed to win a bigger majority, the premier now faces the added pressure of forming a wider coalition, one that will meet his policy requirements. With Labour pushing for greater negotiations with the Palestinians, a new Labour-Kadima pact may prove uncertain and unstable.

Despite these pressures, the new parliament certainly contains a stronger centrist bent. Unlike the previous parliament, around three-quarters of the new deputies are in favour of some form of withdrawal from the West Bank. The only contention is whether the chamber is as enthusiastic as Olmert to separate from the Palestinians in the unilateral fashion favoured by the premier; Kadima officials and the premier's supporters appear to think so. Kadima deputy Haim Ramon claimed as the results were being released: 'This plan has 80 seats. Eighty seats that support this plan. Two-thirds of the people! That's the most dramatic thing that happened.' Olmert will be forced into compromising on some aspects of his programme, even with this optimism, given that he will not be able to form a government without Labour's backing. The latter's focus on social and economic improvements is bound to impact on the make-up of Olmert's cabinet. 'Assuming there is a coalition with Kadima and Labour, we'll expect to be offered significant portfolios, firstly the Finance Ministry. You cannot talk about social issues without the finance portfolio', Labour deputy Eitan Cabel said.

According to other projections, Olmert may agree to a 80-seat coalition with Labour, Shas, United Torah Judaism, the left-wing Meretz, and the Pensioners List. While this may provide the premier with a healthy parliamentary coalition majority - on paper at least - the disparate party interests would inevitably cause complications for Kadima as it seeks to impose its political agenda. As Kadima and Labour begin a series of intricate negotiations, the new political landscape offers an altogether different outlook for Likud. Binyamin Netanyahu, once the darling of the right, has vowed to remain in his post as party leader although political reality will probably dictate otherwise. As Israeli newspaper headlines this morning declared 'the downfall' of Likud, Netanyahu conceded that the results provided little solace for his party: 'There is no doubt that we have suffered a heavy blow'. Likud's erstwhile opponents relished the prospect of its fall; a jubilant Yedioth Ahronoth newspaper proclaimed that 'the staggering news last night was neither Kadima, nor the Labour party. It was the crash of Likud, the sweet revenge for the man [Ariel Sharon] hospitalised...who, with his eyes closed, has inflicted a humiliating setback for Netanyahu'. 

Outlook and Implications

The Israeli elections were staged on the same day as a new Palestinian government dominated by the Hamas movement was officially approved. That the new Israeli government is now expected to push for a unilateral, albeit limited, withdrawal from the West Bank, and that Hamas has vowed to maintain its resistance against Israel, are together not a coincidence. Given the distance between the two sides, the most immediate result is perhaps the stalling of the peace process. Olmert has pledged not to negotiate with a Hamas-led Palestinian Authority (PA) and Hamas is in little haste to recognise Israel. Caught in the middle of this stand-off is unfortunate Palestinian President Mahmoud Abbas. Reacting to Kadima's victory, Abbas urged Olmert to abandon plans to set Israel's borders unilaterally, given the unrest such a move would stir in the Palestinian territories. How much leeway Olmert's supporters within Kadima will offer the premier in meeting Abbas's demands remains to be seen. Given that Israelis have not convincingly voted for Olmert's unilateralism programme, a small door towards future negotiations with the Palestinians may still be open.

Contact: Raul Dary

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