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Israelis go to the polls on 22 January in an election that will go a long way to defining the country's domestic stability and future relationship with the United States.
IHS Global Insight perspective
The election is likely to result in victory for Prime Minister Binyamin Netanyahu, with the right-wing bloc of religious-nationalist parties set to defeat the centre-left bloc.
The divisiveness of the campaign means that Netanyahu is likely to form a new government potentially more hardline and uncompromising than the one he currently heads.
Such a government is unlikely to show much appetite for reinvigorating the peace process and may find itself increasingly at odds with its major ally, the United States.
An Israeli ultra-orthodox Jewish man walks past an election campaign billboard
"I will continue to stand firm on Israel's vital interests for the security of the citizens of Israel," was how Netanyahu responded to an article published by Bloomberg on 14 January in which US President Barack Obama is quoted as telling his administration officials in private in November that: "Israel doesn't know what its own best interests are."The article, written by long-time Netanyahu critic Jeffrey Goldberg caused a stir in Israel and led members of the prime minister's Likud party to accuse Obama of interfering in election campaign. For many commentators though, the timing of the article's publication was widely seen as retribution for Netanyahu's perceived favouritism towards Obama's Republican rival Mitt Romney in the 2012 US presidential election.
Few if any Israelis will cast their votes based on the views of the US president, but in a lacklustre and somewhat muted election campaign in which the result has often been seen as something of a foregone conclusion, Obama's indirect intervention has helped crystallise the importance of the vote. In the wake of the tumultuous events of the Arab Spring, faced by what it perceives to be an existential threat posed by the Iranian nuclear programme but also having to come to terms with a US administration reprioritising relations with its allies and rivals, Israel finds itself once more at a diplomatic and political crossroads.
A continued drift to the right?
The 2009 election may have been won by the centrist Kadima party, but the dominance of religious-nationalist parties from the right ensured that it was the Netanyahu-led Likud party that ended up forming the government. Viewed as somewhat unwieldy at the time – six parties made up the ruling coalition – the government, built on the solid axis of Likud and Avigdor Lieberman's Israel Beiteinu, proved surprisingly durable in comparison to previous Israeli governments. The exclusion of parties for the centre and left though was always likely to prove divisive and government's term in office has seen the increasing polarisation of Israeli society along political and religious lines.
That said, the political landscape entering the 2013 election is very different to 2009. Kadima has collapsed in on itself, split apart by feuding and defections. Former party leader Tzipi Livni left politics for a short while only to return in 2012 at the head of a new centrist party, Hatnuah (The Movement). Long-time defence minister and Netanyahu confidant Ehud Barak has retired from politics while Labor, capitalising the social-economic protests that rocked Israel in 2011, is resurgent under Shelly Yacimovich. The arrival on the political scene of Yesh Atid, led by former television host Yair Lapid, has also provided fresh impetus to the centre–left of the political spectrum.
Yet it is the religious and nationalist right that continues to dominate and arguably set the agenda of Israeli politics. Netanyahu and Lieberman shocked the establishment in October 2012 by announcing the merger of Likud and Israel Beiteinu under the moniker Likud Beiteinu (The Likud is Our Home). The two parties are running a joint candidate list in the election. That candidate list can best described as hardline as the Likud primaries saw many party moderates rejected in favour of pro-settler nationalist candidates. This hardening of the Likud Beiteinu stance has been accompanied by - or perhaps occurred as reaction to - the rapid and surprise emergence of hardline nationalist Habayit Hayehudi (Jewish Home).
Habayit Hayehudi won just three seats in the 209 election, but under the new charismatic leadership of billionaire software tycoon Naftali Bennett, the party has seen its fortunes transformed to the point where it is predicted to be the second strongest right-wing party after the election – a result that may allow it to hold the post-election balance of power. However, Habayit Hayehudi's policies are deeply controversial and include calling for the annexation of large parts of the West Bank from Palestinian control and the renunciation of the USD3 billion provided by the US every year in foreign military funding as a means of freeing the country from what it sees as Washington's overbearing influence.
Netanyahu's thinly-veiled endorsement of Mitt Romney and Obama's less-than-subtle intervention have all too clearly demonstrated the increasing difference in style and policy between Israel and the US. Netanyahu's neo-conservatism may have made him a welcome guest of former President George W Bush, but it sits uneasily with Obama as he has sought, often erratically and without great success, to reorient US foreign policy away from the Middle East.
As such, while Iran and its nuclear programme remains an existential threat for Israel and one that requires concerted international action at the earliest possible moment, the Obama administration views it as one of many serious, but containable issues in the immediate term. Moreover, during the last four years, Washington to has adopted a much more critical tone towards Israel's settlement construction activity in the West Bank reminiscent of its European allies. Indeed, Washington's era of uncritical acquiescence to Israel's activity in this area may be coming to an end.
None of this means that Israel and the US will inevitably drift apart as some of Netanyahu's critics suggest will happen if he is re-elected, but it does mean that a more critical evaluation of what both sides can expect from the other, at least for the period of the next four years, may be necessary.
Outlook and implications
Netanyahu's campaign rhetoric is likely to be reigned in once his likely victory is confirmed, but he has made many enemies during his time in office and, although by far the pre-eminent figure in Israeli politics, the admiration and respect he seems to crave remains curiously elusive as accusations from opponents that he lacks gravitas and is prone to evading making tough political decisions continue to dog him. In all likelihood he will end up leading the next government, barring the unlikely - but not impossible - event of the other parties uniting against him. The shape and policies of the coalition he subsequently assembles could have profound implications for Israel, the region and beyond.