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UPDATE: Israel votes late Tuesday put Likud ahead, with Benjamin Netanyahu declaring a “great victory.” The Zionist Union statement said “the rightest bloc has shrunk,” and premature to know outcome yet.

After the ballot boxes were closed at 10 P.M. Tuesday, exit polls showed the Likud held one-seat lead over the Zionist Union, 28-27. However, final results (still being counted) indicate the Likud’s lead may be more substantial. President Reuven Rivlin said he would work for a national unity government. [Haaretz]

ISRAELI POLITICS is actually crazier than ours, with so many parties and competing agendas, forming a majority coalition that reaches 61 votes isn’t easy, which is what it takes to form a government. It’s bread and butter issues versus security, though it’s always about the latter. Current economics, however, have to play a part this time, because things have gotten bad, the blame landing on Likud for good reasons.

“The whole political spectrum has shifted,” said Brent E. Sasley, an associate professor of political science at the University of Texas at Arlington. Though there have always been third parties at the center of Israel’s political spectrum, what has really empowered the Zionist Union and other centrist parties during this election is “the growth of centrist voters who are not happy with the way that the country’s social and economic trajectory has gone,” he said. [IBT]

The New Yorker has a piece on Israel’s “new political center” that is worth a read.

This is one big reason why Benjamin Netanyahu reversed himself on Monday about a two-state solution, which everyone knows is the only answer, a desperate attempt to scare voters and swing them his way. From the New York Times:

Under pressure on the eve of a surprisingly close election, Prime Minister Benjamin Netanyahu of Israel on Monday doubled down on his appeal to right-wing voters, declaring definitively that if he was returned to office he would never establish a Palestinian state.

The statement reversed Mr. Netanyahu’s endorsement of a two-state solution to the Israeli-Palestinian conflict in a 2009 speech at Bar Ilan University, and fulfilled many world leaders’ suspicions that he was never really serious about peace negotiations. If he manages to eke out a fourth term, the new stance would further fray Mr. Netanyahu’s ruinous relationship with the Obama administration and heighten tension with European countries already frustrated with the stalled peace process.

Things are so bad between the Palestinians and the Israelis that a recent article in Foreign Policy gave a chilling warning as things rock inside the Palestinian leadership: “the dissolution of the Palestinian Authority and the West Bank’s potential transformation into an ungoverned space that could become a haven for terrorism.”

When it comes to the Israelis and Palestinians, as I learned a long time ago, it’s about equilibrium, not peace. Something Steve Clemons has written about often, with whom I’ve been friendly and someone who’s taught me a lot about Middle East diplomacy. There simply will be no equilibrium if Netanyahu retains power.

Jeffrey Goldberg’s interview with Isaac Herzog, who could end up sharing power with Netanyahu, reveals he’s much more in line with the President Obama. That means he’s aware of the threats against Israel, but he also lives in the 21st century, unlike Netanyahu, who never looks forward.

In my conversation with Herzog in December, he opened with an adamant declaration that his candidacy was a serious one. “There is … this notion that Netanyahu, or the Likud, is unbeatable,” he said. “I am here to tell you that I will form the next government and I will lead Israel to a different direction. And it’s feasible if we build the proper coalitions in Israeli politics.”

Daniel Levy, of the European Council on Foreign Relations, someone I’ve heard speak many times on the Middle East, is as good as it gets on this subject, outlined the election last week.

For the first time this century the leader of Israel’s Labour Party appears to be genuinely competing for the position of Prime Minister. In every election since Ehud Barak’s victory in 1999 the Labour Party has faced a double digit Knesset seat deficit in comparison to the winning party. When Netanyahu called for early elections the expectation was that the elections would again centre around what kind of a coalition he would form, much as was the case in 2013. After all, it was Netanyahu’s decision to go back to the voters after only two years.

What has emerged in the course of the campaign is threatening to become a perfect storm that could leave Israel’s second-longest serving Prime Minister out in the cold. While Netanyahu still remains favourite to be best positioned to form a coalition, momentum is with the “anyone but Bibi” camp.

The first shaping event of this election was the early alliance formed between Labour and the centrist party, Hatnuah, of Tzipi Livni (former Kadima party leader, outgoing justice minister in the old Netanyahu coalition, and chief peace negotiator). The combined list – known as the Zionist camp – immediately created a near parity between itself and Netanyahu’s Likud list. And while neither comes close to even winning a quarter of the Knesset’s seats, let alone a majority, they now seem to be competing over who will be the biggest party and take the lead in forming a new governing coalition.

In recent days a gap has emerged in polls in favour of the Zionist camp. The elusive momentum factor is with Zionist Camp candidate Isaac Herzog, and that can be attributed to a few factors. …

UPDATE: Benjamin Netanyahu’s high pitched squeals meant to scare Israelis into voting have pushed Likud into a leading position, with the same old battle lines remain drawn.

2:30 A.M. The chief Palestinian negotiator expects Prime Minister Benjamin Netanyahu to form the next Israeli government and has declared that the Palestinians in turn will push forward with diplomatic efforts at the International Criminal Court.

“It is clear that Prime Minister Benjamin Netanyahu will form the next government, and for that, we say clearly that we will go to the Hague Tribunal, we will accelerate, continue and intensify” diplomatic efforts, top Palestinian negotiator Saeb Erekat told Agence France-Presse. (JTA)

1:10 A.M. Netanyahu: “Dear friends, against all odds we have achieved a great victory for Likud, for the national camp which is headed by Likud, for our people. I am proud of the Israeli people, who recognized what’s important … and stood up for real security, economy and social welfare, which we are committed to.

“This is what’s important to… everyone, Jews and non-Jews alike,” he said. “All of you are important to me.

“Now we must form a strong and stable government that will care for the security and welfare of all of Israel’s citizens,” he said.

[Haaretz]

This article has been updated.