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Key Points

• Despite emerging with the second largest party, Likud leader Benjamin Netanyahu looks most likely to be Israel’s next prime minister, because he has the best chance of forming a coalition. He would prefer to construct a broad centre-right coalition with Kadima’s Tzipi Livni rather than a narrow right-wing government. He knows from experience that this would give him more room for manoeuvre on the diplomatic front.
• Netanyahu and his predecessors in the Likud have taken bold and unexpected decisions in the past with regard to the peace process. If he becomes prime minister, he will be conscious of the need to coordinate policy with the Obama administration, and has already made clear his desire to work pragmatically with the Palestinian Authority.
• Ultimately, the Palestinian political crisis and the engagement of the Obama administration in the region will have a greater bearing on the Israeli-Palestinian diplomatic agenda than whether Netanyahu or Livni becomes Israeli prime minister.

Introduction

In the coming days, Likud leader Benjamin Netanyahu is likely to be formally tasked with forming the next Israeli government. With 27 Knesset seats, his party won one less mandate than Tzipi Livni’s Kadima. However, Netanyahu is considered better placed because right-leaning parties emerged with a ten-seat advantage over the leftist bloc.

It remains far too early to tell how the next coalition will be finalised.  But it is worth reflecting on Netanyahu’s coalition options and the implications of his resurgence for the peace talks with the Palestinians. Netanyahu’s preference for a broad centre-right coalition is an indication that he wants to give himself the most possible political room for manoeuvre. Regional issues, particularly the growing threat of Iran and its allies and the changes in US policy, will be the context which defines the next government’s choices. Should he become prime minister, Netanyahu will have to work with the realities that he confronts as well as try to shape them. This analysis looks at how a Netanyahu-led government might handle the peace process and wider regional challenges.

From politics to policy

It is a simplified reading of Israeli politics to think of Netanyahu’s position as a blunt ideological rejection of the compromises required for peace. Because few believe a comprehensive solution to the Israeli-Palestinian dispute is possible whilst the Palestinians are internally divided, the political debate in Israel has been more about how to manage, rather than solve the conflict. As such, the recent campaign was dominated more by personalities than by ideologies. Traditional ideological slogans – in Livni’s case talking about the ‘dove of peace knocking at the window’; in Netanyahu’s case, issuing a promise not to give up the Golan Heights – came only in the final thrust for votes at the very end of the campaign.  In this context Netanyahu presents himself first and foremost as a conservative guardian of Israel’s national security.

It is worth recalling that the last time he was in office, Netanyahu in fact tried to negotiate a secret deal with Syria in which his mediator claims that he was willing to cede the Golan entirely.^[1] This would have been consistent with other major policy decisions by Likud prime ministers. Menachem Begin relinquished the Sinai for the historic peace with Egypt in 1979, and Ariel Sharon withdrew from Gaza in 2005.  Most recently, Ehud Olmert, whose political roots are also firmly right of centre, has laid out far-reaching measures he believes necessary in the framework of an agreement with the Palestinians, including Israeli withdrawal from most of the West Bank.

It is true that Israelis have become increasingly sceptical about regional peace since withdrawals from southern Lebanon and Gaza have led to wars with Hezbollah and Hamas.  It is no coincidence that over 70 percent of voters in the southern Israeli towns and cities which bear the brunt of Hamas rocket fire voted for right-leaning parties last week.[2] Even so, most Israelis accept the idea of a two-state solution. This is why the Likud’s election platform, whilst arguing that the Palestinians are not ready for a historic compromise, nonetheless maintained that the party “is ready for concessions for peace.”[3] Netanyahu perceives the Iranian nuclear threat as Israel’s paramount security challenge,[4] but he is conscious of the need to address the Palestinian issue as well. Whilst he has been highly critical of the attempts to reach a ‘shelf agreement’ under the Annapolis Process, he has enthusiastically adopted the mantra of ‘economic peace’; proposing fast impact projects that would improve the economy for Palestinians in the West Bank.[5] 

Responding to the charge that his policy vision is merely an excuse for maintaining Israeli presence in the West Bank,[6]  he recently commented, “I’m not interested in continuing to control the lives of Palestinians,” adding that his plan would proceed “in parallel” with political negotiations.[7] He contrasts his approach with the “political stagnation” which he perceives to have characterised Ehud Olmert’s tenure as prime minister.

Netanyahu recognises that the US and the EU want to see movement on the Palestinian issue, and he conveyed to EU ambassadors in a recent meeting that he would continue Israeli-Palestinian peace talks should he become prime minister.[8]  In a meeting in Jerusalem on Monday, he reiterated the message, stating that, “We need to strengthen the Palestinian moderates and weaken the radicals by pursuing rapid economic growth and bolstering the security apparatus of the Palestinian security authority.” He added that, “A combination of political talk and rapid economic development is the best way to create a new reality in the PA.” Rapid change on the ground, he declared, “is worth one thousand peace conferences.”[9]

Netanyahu’s coalition options: past experience and current preference

There are broadly two types of coalition which Netanyahu could try to form. His preferred option is a broad centre-right government with Kadima. The other is a narrow coalition of the right-wing religious and nationalist factions. Netanyahu has acknowledged that he made a mistake when he served as prime minister from 1996 to 1999 in forming a right-wing government rather than joining forces with Labour under Shimon Peres.[10]  His right-wing coalition partners ejected him from power after he furthered peace negotiations, signing first the January 1997 Hebron Agreement and then the October 1998 Wye River Memorandum with Yasser Arafat.  The groundwork had already been laid by Netanyahu’s predecessors for the Hebron deal, but the Wye River agreement was initiated by the Clinton administration on Netanyahu’s watch.  It was a comprehensive document based on territorial concessions designed to break the deadlock in the peace process and enable Israelis and Palestinians to tackle permanent status issues.[11]

Whilst having a range of coalition options might be thought to give political leverage to Netanyahu, his position is weakened by bitter discord within the right-wing bloc. Conflicting social policy visions and views about Israel’s future borders between the fervently secular leader of Yisrael Beiteinu, Avigdor Lieberman, and the religious Sephardi Shas party, are compounded by other religious-cultural and political tensions with the smaller right-wing parties.

Netanyahu knows how to reach out to the religious communities and ‘nationalist camp’, but he has also worked hard in the election campaign to distance himself from extremist elements both within the Likud and on the ‘hard’ right, presenting himself to the public as a moderate leader. Following the last Likud primaries, he demonstrated his contempt for Moshe Feiglin, an extremist member of his party, by approving a manipulation of the party list which effectively prevented him from entering the Knesset. From Netanyahu’s point of view, leadership of a wide coalition would reinforce the moderate image that he is trying to build.  After the dismal performances of both Labour and Meretz last week, the only real way for Netanyahu to achieve this would be to reach an agreement with Kadima. This would provide him with a coalition that is likely to last longer, and give him greater freedom of manoeuvre when it comes to dealing with the Palestinians.

Tzipi Livni staked her territory as a principled, conviction politician when she refused to bend to Shas’s demands in her attempt to form a coalition last autumn. She would gamble this reputation if she were to join a Netanyahu-led government without firm guarantees about its direction. It is unclear whether she would form a partnership on the basis of a rotation, in which the prime minister’s term would be split between herself and Netanyahu – a model used by Shimon Peres and Yitzhak Shamir in the mid 1980s. Whilst Netanyahu has so far refused to consider this unlikely option, the idea still has currency among some commentators.

The bigger picture

The identity of the next Israeli prime minister and the nature of the next coalition government will have an impact on peace negotiations, but external pressures are a  significantly greater factor affecting the Israeli-Palestinian peace process. The divided Palestinian leadership presents perhaps the clearest structural impediment. As Foreign Secretary David Miliband stated in a BBC interview last Friday, “The Palestinian people in Gaza and the West Bank desperately need a government that covers both those parts of the Palestinian territory, because the divide between Gaza and the West Bank threatens to end forever the vital goal of a two-state solution in the Middle East.”[12]  He expressed hope for an interim non-factional government which would be able to improve Palestinian humanitarian conditions as a short-term priority.  This has been prevented thus far because the divisions are too deep to bridge and there has been no leader who is strong enough to reconcile the factions or impose new internal arrangements. The splits are more complex than a simple Fatah-Hamas dichotomy would suggest, with internal power struggles present in both movements.

More constructively, new energy is being provided by the Obama administration. Fresh thinking from the new administration has the potential to create new opportunities for addressing the Palestine-Israel question through the wider prism of regional peace issues.  Yehezkel Dror, a senior professor of political science at Hebrew University, argued persuasively in Haaretz on the eve of last week’s election that in response to the American desire for fresh diplomatic initiatives, Israel needs to develop a comprehensive strategic outlook which includes full normalisation with the moderate Arab world, an undermining of Iran and radical groups, and credible security arrangements.  He concludes, “In this context, it does not make too much of a difference who wins the upcoming elections.  All candidates for becoming prime minister understand the diplomatic-security realities, never mind their declarations… the new prime minister will need radical diplomatic creativity and a long-term vision for the region.”[13]

Conclusion

That the Israeli election did not result in an undisputed victory means that the next few weeks will see a frenzied period of political manoeuvring, whilst the established process of coalition forming takes place. If Benjamin Netanyahu does become prime minister for the second time, he will hope to apply lessons from his past experience, and avoid being constrained by right-wing coalition partners. He will seek to maintain the relationship built up between Israel and the Palestinian Authority in the West Bank. He knows that this is an important part of the effort to promote moderation and isolate extremism, and that to do otherwise would erode Israel’s diplomatic capital in the US and Europe. But at the same time he will probably try to focus international, and particularly American, attention on the need to remove the regional impediments to peace presented by Iran and its allies, before addressing the establishment of a Palestinian state.

 

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[1] Martin Indyk, ‘Can this batch do peace?’, International Herald Tribune, 13 February 2009

[2] David Makovsky, ‘Israeli Elections Result: Implications for Middle East Peacemaking’, The Washington Institute for Near East Policy, PolicyWatch No. 1478, 13 February 2009

[3] Oded Eran, ‘The Elections in Israel: Diplomatic Implications’, INSS, Insight No. 93, February 12, 2009

[4] Ibid.

[5] David Makovsky, op. cit.

[6] See, for instance, ‘Netanyahu’s “economic peace”‘, Bitterlemons, 24 November 2008.

[7] Barak Ravid, ‘Netanyahu: I don’t want to rule in West Bank’, Haaretz, 12 December 2008.

[8] Steve Weizman, ‘Israel’s Netanyahu tells EU he will pursue peace’, The Associated Press, 11 December 2008.

[9] Etgar Lefkovits, ‘We must strengthen PA security forces’, The Jerusalem Post, February 16, 2009

[10] Martin Indyk, op. cit.

[11] The Wye River Memorandum: Interim Agreement, US State Department, 23 October 1998; for a detailed account, see Dennis Ross (2004), The Missing Peace: The Inside Story of the Fight for Middle East Peace (New York: Farrar, Straus and Giroux).

[12] Hardtalk interview with David Miliband, BBC, 13 February 2009.

[13] Yehezkel Dror, ‘A new peace paradigm’, Haaretz, 9 February 2009.