Sharon's gamble pays off

When I first wrote about Israeli Prime Minister Ariel Sharon's decision to quit the Likud Party and set up his own centrist Kadima party last year - in the aftermath of Israel's unilateral withdrawal from Gaza - I described this development as a political earthquake. Last week's parliamentary election result in Israel indeed confirmed that a political earthquake has taken place, although perhaps not as large as some had predicted.

Kadima, led by Acting Prime Minister Ehud Olmert, emerged as the largest parliamentary party, winning 28 seats in the 120-strong Knesset, while the right-wing Likud Party saw its number of seats reduced to only 11, a humiliating result.

Israel has always had a multi-party system dominated by the Likud and Labour parties but with no one party getting an overall majority of seats. Coalition politics are the norm in Israel, with one of the two main political parties heading the coalition and having to depend on one or more smaller parties for a stable parliamentary majority.

This has not changed and Kadima will have to team up with two or three other parties to form a government. What has changed is that for the first time in Israeli politics an election result has produced a Prime Minister not from Labour or Likud. Yes, Mr Olmert and Mr Sharon were already in Kadima before the election but they had not yet been given a popular mandate - they simply broke off from Likud.

The full result of the election (in seats) is as follows: Kadima: 28; Labour 20; Shas (ultra-Orthodox): 13; Yisrael Beitenu (mainly Russian immigrants): 12; Likud: 11; National Union-National Religious (right-wing nationalist): 9; Pensioners: 7; United Torah Judaism (ultra Orthodox): 6; Meretz (left-wing): 4; and others: 10. So it is clear that Israel's party system is very fragmented, mainly due to the strict proportional representation electoral system.

Mr Olmert will now have to work hard at putting together a coalition government. His likely major partner is bound to be the Labour Party led by Amir Peretz, which campaigned hard on social welfare issues and which prefers to conduct bilateral negotiations with the Palestinians in contrast to Mr Olmert's pledge to take unilateral decisions on Israel's permanent borders. However, Kadima is far closer to Labour than it is to Likud, so the two must work together. Furthermore, Shimon Peres, a leading light in Kadima, has strong contacts with Labour, having spent his entire political career in that party, and also having led it in the past.

Kadima and Labour together have 48 seats, 13 short of a majority. So one or two other parties will have to join the coalition or perhaps simply support the minority government in Parliament without being given any Cabinet seats. Either way the smaller parties are expected to demand a high price for their support. It is also possible that Kadima will try and govern alone with no coalition partner and try and get parliamentary approval for its government programme.

Besides Kadima, the main winner in this election was the Yisrael Beitenu party, which got 12 seats - an increase of 11, and which is a right-wing party tough on crime. It is mainly supported by Russian immigrants (of whom there are 750,000 in Israel), and this just shows how powerful a force the Russian immigrants have become. Yisrael Beitenu had already hinted that it could be part of a Kadima-led coalition government.

The Labour Party, too, has reason to celebrate as it withstood the onslaught of Kadima by losing only two seats, making it the second largest political party. Likud, however, could not cope with the emergence of this new force on the political stage - still dominated by Sharon's powerful legacy - and it saw its share of the seats reduced from 38 to 11, losing to both Kadima and Yisrael Beitenu. It also lost votes as a result of tough economic decisions taken by party leader Benjamin Netanyahu when he was Finance Minister under Mr Sharon, before he quit last year in protest at Israel's disengagement from Gaza. It is now doubtful whether Mr Netanyahu can survive as party leader.

Although the government will have to deal with many economic issues, especially since many of Kadima's potential allies made generous electoral pledges, the main focus of the new coalition will be Mr Olmert's promise to finalise plans to determine Israel's borders, on a unilateral basis if necessary. Mr Olmert wants to strengthen Israel's hold on the main settlements in the West Bank while dismantling settlements elsewhere - which would mean forcibly removing about 70,000 settlers, a far bigger operation than what took place last year in Gaza. Under Mr Olmert's plan, Jerusalem (including Arab East Jerusalem) would remain part of Israel.

Such a plan, however, would leave a large part of the West Bank - which the Palestinians see together with Gaza as their future state - in Israeli hands, and then there is the delicate question of Jerusalem. Both Palestinian President Mahmoud Abbas and the new Hamas-led Palestinian government have said that Mr Olmert's unilateral proposal is unacceptable. Of course, the fact that Hamas has still refused to recognise Israel, to remove the part of its charter which calls for the destruction of the Jewish State and to stop its armed struggle against Israel, has complicated matters greatly. In these circumstances one cannot blame Israel for not wanting to deal with Hamas.

Although I don't expect Hamas to recognise Israel immediately - Ireland took 60 years to recognise British sovereignty over Northern Ireland - Hamas would be naïve (as well as simply wrong) not to renounce violence and its call for Israel to be destroyed. How can anyone expect Israel to deal with an organisation that calls for its destruction? True, Israel can deal with Mahmoud Abbas, but how far can the Palestinian President negotiate on his own without the backing of his government?

While Israel's friends and allies must caution Mr Olmert about the risks of acting unilaterally, the Arab world must put pressure on Hamas to renounce violence, respect past treaties and stop calling for Israel's destruction. Only then will any sort of progress be made between Israel and the Palestinians.