Security or economy for Israeli voters
02:47 - Source: CNN

Story highlights

Prime Minister Netanyahu's party is expected to win and he is expected to return to power

Would Likud Beitenu go hard-right or include centrists?

Iran remains an issue for the United States and Israel in the future

Tzipi Livni, Naftali Bennett, Shelly Yacimovich, Yair Lapid -- all vying for power

The pundits in Israel, the United States and the West Bank have pretty much forecast the winner of Tuesday’s Israeli national elections.

Benjamin Netanyahu’s right-wing political coalition with former Foreign Minister Avigdor Lieberman– Likud Beitenu – will prevail. He’ll trot to the finish line in an easy horse race, analysts say, citing poll after poll.

But this is just the first stage in forging a new government. After the election for Knesset seats, the arduous government coalition-building begins.

That’s not a horse race, It’s a bit of “foreplay,” as one newspaper put it, and hard-nosed political jockeying.

For now, the 34 parties running from the right, center, and left are maneuvering but digging in their ideological heels.

“The data projects not a more right-wing Knesset,” said Michael Singh, managing director of the Washington Institute for Near East Policy, “but a more polarized one.”

Polls show that Netanyahu’s party will get the most seats of any party in the Knesset, Israel’s parliament, and his bloc will be the core of the predominantly Jewish state’s new government.

The powerful bloc will attract a mainstream Israeli in a country many say is moving rightward.

They are anxious over anti-Israel Hamas adherents next door in Gaza, the chaos in nearby Syria and Egypt, and the nuclear machinations of their No. 1 foe – Iran.

When Netanyahu declares “we are living in a dangerous neighborhood,” that’s a deeply felt message resonating for a critical mass of Israeli Jews, from the Negev to Netanya.

But issues have emerged front and center in the race: one, most prominently, is economic anxiety.

That’s a ready-made cause for centrists and the left and a threat to the rise of the right in a one-time socialist country morphing capitalist.

Israel is wrestling with a $4 billion budget shortfall; in fact, the election was called because of a failure to adopt a 2013 budget.

Frustrated citizens who took to the Tel Aviv streets in 2011 to protest the country’s high cost of living and lack of affordable housing will bring their pocketbooks to the polls.

Shelly Yacimovich, the Labor Party leader, is running a distant second to Netanyahu’s party, but her message hits home, at the kitchen table doing bills, just the same.

“The tremendous feeling that, with one piece of legislation,” she said. “I can change the quality of life of tens of thousands of people is something which is very rewarding and gratifying.”

A restive political culture

Israel, established as a Jewish state and homeland, has an estimated 7.5 million population. It is more than 75% Jewish, with diverse backgrounds from Europe, the Middle East, Africa, and the Americas.

The others are mostly Arab Muslims and Christians – Palestinians and their descendants who stayed in the country after the state was founded in 1948.

The State of Israel is a parliamentary democracy. Its political culture contains big and small political blocs and movements from all sectors of society, ever shifting, disappearing, growing, declining.

No party ever gets an outright majority in the 120-seat Knesset. After Israeli elections, coalition-building begins to get a majority.

This election doesn’t pit one big personality against another, as past races have. After the emergence of the centrist Kadima last decade broke up the rivalry between right and left, Israel has been a bit more fragmented.

Will the new government lurch to the far right?

Netanyahu’s Likud-Beitenu is the product of a coalition – an uneasy alliance – between Netanyahu’s Likud and Lieberman’s even more right-wing Yisrael Beitenu.

Along with its vigilance on security, Likud-Beitenu is supportive of West Bank Jewish settlements, whose presence is reviled by Palestinians and many Israelis as well as obstacles to a peace agreement.

Polls are saying the coalition will get 30-some seats, the most of all the parties signed up to participate.

Likud-Beitenu is trending more to the right. Haim Malka, an analyst with the Center for Strategic and International Studies, said a growing nationalistic and religious faction has asserted influence within the internal politics of Likud.

Another right-wing party, a religious and nationalist movement called Jewish Home, is gaining strength. Its leader is Naftali Bennett, a charismatic rising star in Israel.

He’s Netanyahu’s former chief of staff, a self-made high-tech millionaire with a well-regarded military track record. His movement, analysts say, could gain Knesset seats in the teens.

The group wants to annex territory in the West Bank and backed a ground invasion during last year’s war in Gaza.

Malka explained Bennett’s appeal to some voters.

“He’s young, he’s fresh, ” Malka said. “He hasn’t been in politics long.”

Bennett’s party, a coalition of smaller political parties, attracted voters from other movements, including Likud.

“He personally is not a deceiver. He is a sincere and worthy individual,” said Ari Shavit, columnist for the daily Haaretz.

“But the phenomena is a deceiving phenomena which enables the extreme right to win the hearts of many moderate right-wingers and even centralists who don’t understand that when the vote for this high-tech guy from Ra’anana they actually vote for an ideology which wants to annex most of the West Bank,” Shavit said.

Jewish Home’s gain in popularity might “explain why, in the aftermath of the November 29 U.N. vote on Palestine, Netanyahu pushed for settlement planning (albeit not construction) northeast of Jerusalem, in the controversial 4.5 square-mile area designated E-1,” said the Washington Institute’s David Makovsky, an Israel expert.

Palestinians are upset with that plan because settlements in that spot would break up the contiguous nature of a future state.

Smaller right-wing, religious and/or centrist parties could help round out a predominantly right-wing government.

There’s less political flexibility with a right-wing coalition, Singh says, but that might be the only option for Netanyahu.

Data “projects a weaker position for Prime Minister Netanyahyu in coalition politics,” Singh says.

This “could well mean a more right-wing government than that he currently heads, though – depending on what deals he is able to cut – this is hardly a foregone conclusion.”

Will the government include centrists and leftists?

One of the positives for the center-left, which had been more dominant in other times, is that Netanyahu might want political flexibility. If an opportunity for peace negotiations with Palestinians would present itself, for example, he would want wiggle room to operate.

Three main left or centrist parties have emerged, with Labor predicted as getting the second highest number of seats in the high teens after Likud-Beitenu.

“In contrast to Netanyahu’s merger, efforts to unite center-left parties have floundered thus far, drastically hurting their prospects,” Makovsky said.

Labor’s Yacimovich has focused her energy almost solely on economic issues, roiling Israeli citizens. She doesn’t much touch on foreign policy as the party had in the past.

Yesh Atid is focused on the economy and halting the military draft exemptions for ultra-Orthodox civilians. Its leader is Yair Lapid, whose late father, Tommy Lapid, led Shinui, a onetime secularist party that took on the influence and power of the ultra-Orthodox.

Hatnua is led by former Foreign Minister Tzipi Livni. She too is focused on the economy and backs Israel-Palestinian peace talks. Her emergence raises a question: Would she be a good fit for foreign minister or another Cabinet position in a Netanyahu government?

There is the once-mighty Kadima, the breakaway from Likud and Livni’s former party, that many analysts say is freefalling and in danger of disappearing.

One poll said Yesh Atid could get 11 seats and Hatnua, eight. There are other parties on the left, including Meretz.

“What is noted less often, however, is that left-wing parties have also gained,” Singh said.

Arab parties are perpetual bridesmaids in new governments

Then there are Israeli Arab/Palestinian parties, long a presence in the Knesset but never included in a government coalition.

But they and their constituents are politically diverse and continue to play a role in Israeli politics, said George Jakaman, a political analyst at Bir Zeit University in the West Bank.

At the same time, he said, there is a common denominator, – the fight against inequality and economic and social discrimination.

Hanin Zoabi – the first Palestinian woman to get a seat in the Knesset and running again – laid out the uncomfortable reality.

“Israel considers itself to be a Jewish state, not a state for all its citizens and in Israel it is part of the logic of the system to give privileges to the Jews at the expense of the Arabs, either in land, land confiscation, budget, health care, economic rights even the recognition of my identity,” she told CNN.

“Israel does not recognize me as Palestinian. Israel wants me to be Arab Israeli, something which we don’t understand.”

Jakaman said Netanyahu’s return to power is expected, and that does not bode well for the resumption of the moribund Israeli-Palestinian negotiations. Netanyahu has been more focused on Iran, not the resumption of settlements, he said.

“If he accepts the conditions of the former foreign minister of Israel, Livni, as a condition of joining a coalition,” he might be more willing to pursue talks.

“If he accepts this, there’s a chance his coalition government will not be completely right-wing,” Jakaman said.

What would new government mean for U.S.-Israeli relations?

Iran’s nuclear aspirations haven’t always been front and center throughout the campaign.

“This campaign has been more of a personality competition rather a debate over the strategic issues facing Israel,” Malka said. “So Iran has surprisingly played a minor role.”

But Netanyahu is quoted as telling U.S. senators that “my priority, if I’m elected for a next term as prime minister, will be first to stop Iran from getting nuclear weapons.”

Both Israel and the United States have long been concerned over the danger of Iran having the capability of building a nuclear weapon.

U.S. President Barack Obama and Netanyahu have differed on how to approach this and the settlement issue. They will have to deal with one another, despite reported friction. But this time there will be new players.

Makovsky said that the “most important outcome of Israel’s electoral maneuvering” from an American perspective “may be its impact on Netanyahu’s top Cabinet ministers.”

“Defense Minister Ehud Barak – Washington’s primary interlocutor on Iran and a host of other foreign policy and security issues – has announced his retirement from Knesset campaigning, though he has not ruled out a return to government if invited,” he said.

“Washington is bound to become more concerned about whether Netanyahu will include political opponents in his coalition – and, if not, whether more ‘E-1’-type moves are ahead.”

Israelis are concerned about the U.S. national security team.

Former Sen. Chuck Hagel, who has been criticized by some pro-Israel supporters, got the nod from Obama for defense secretary.

Sen. John Kerry, nominated to replace Hillary Clinton as secretary of state, is regarded as a friend of Israel but “also a staunch critic of Israel’s settlement policy,” reported.

He will deal with Israeli issues and other key foreign policy matters as Obama handles a full plate of domestic matters – such as the debt ceiling and gun control.

Disagreements between the Obama administration and supporters of the West Bank settlements persist.

“A right-wing government is more likely to come into diplomatic conflict with the United States and Europe,” Malka said.

Singh says Israelis are concerned about security but are pragmatic and want peace. He cites a poll showing “an even split on dismantling settlements outside the major blocs” and “strong support” for a two-state solution.

“This deep – if flickering – desire for peace is an opportunity for the Obama administration, and the data also point to a policy path for seizing it. That path must begin with a return to basics.” Singh said.

“President Obama must avoid desperation in either of its primary modes – Hail Mary peace plans or glum inaction. It is never a bad time to push for peace; but making progress will require patient preparation, followed by consistent, unflinching, and unglamorous work.”

CNN’s Joe Sterling reported from Atlanta. CNN’s Sara Sidner and Nicola Goulding reported from Israel. Kareem Khadder also contributed to this report from Israel.