How did Israel's sharpest politician lose his edge?

A series of uncharacteristic errors have left Benjamin Netanyahu weakened as he tries to form a new government. Alistair Dawber on where he went wrong - and what it means for the future

Ignoring the Yesh Atid party and its policies

Benjamin Netanyahu spent most of the election campaign trying to outflank his right-wing political protégé, Naftali Bennett, who resigned as the Prime Minister's chief-of-staff in 2008. It was a largely wasted effort.

Mr Bennett's new party, Jewish Home, won just 11 of the 120 Knesset seats on what was a bad night for the Israeli right. The clear winner (if not the overall victor) was the newly formed Yesh Atid, led by the charismatic former TV personality Yair Lapid, which collected 19 seats, securing second place.

Normally finely tuned, Bibi's political radar missed the rise of the Yesh Atid. But it cannot be ignored any longer. Last night Mr Lapid positioned himself as kingmaker, saying that he would not join any bloc set up to prevent Mr Netanyahu from forming a new coalition. “The outcome of the election is clear,” he said. “We must work together.”

As coalition talks get under way Mr Lapid's opinion will be listened to like never before. Prior to the election he used a popular newspaper column titled, “Where is the money?”, to outline the key themes of his campaign, writing: “This is the big question asked by Israel's middle class, the same sector on whose behalf I am going into politics, Where's the money? Why is it that the productive sector, which pays taxes ... performs reserve duty and carries the entire country on its back, doesn't see the money?”

He demanded that those with protected status in the Jewish state, largely the ultra-Orthodox, work and do military service, which they are currently exempted from – a source of irritation to many secular Israelis.

It seems Bibi missed these signals. Writing in The Jerusalem Post, columnist Ben Hartman, said: “Bibi was spoken of as a man who took a bite out of the poor… While people spoke favourably of his stewardship on the security front, there was little sentiment that peoples' lives were better off than four years ago.”

Allowing Avigdor Lieberman and Yisrael Beiteinu on his Likud ticket

The body language said it all. At their post-election rally on Tuesday night, Mr Netanyahu and his formal coalition partner, Avigdor Lieberman, made little eye contact and only fleeting references to each other.

The reason is obvious. Their combined parties, known as Likud-Beiteinu, held 42 Knesset seats before the election. Now, months after formally deciding to be joined at the hip for this year's election, the party is reeling with only 31 members.

Mr Netanyahu brought Yisrael Beiteinu under his wing, against the better judgment of some in his party, in an attempt to shore up his vote among hardline right-wingers and settlers.

The decision backfired almost immediately. Mr Lieberman, who lives in a West Bank settlement, and has a conviction for assaulting a 12 year-old boy, was charged last month over two year-old fraud and breach of trust allegations that prompted his sudden resignation as Foreign Minister.

The advantage of having Mr Lieberman onside, of course, is that he will be a steadfast supporter, and if Tuesday's result means that Bibi has to bring in centrist parties into his government which may not be keen on going after Iran, for example, he can rely on Mr Lieberman's support.

But Mr Lieberman's alleged criminal misdemeanours are just the start. He has actively sought controversy during his political career, and some of his views and statements have led some to question his suitability for a government post. In November 2006, he described Arab members of the Knesset who met with members of Hamas, as “terrorist collaborators” and called for their execution. Sadly for Mr Netanyahu, he is now saddled with Mr Lieberman, although if there are new elections, he could jettison him.

Foreign policy errors

On Tuesday night as Mr Netanyahu was making conciliatory noises towards Mr Lapid and others that performed well, he reiterated that his priority was to prevent Iran attaining a nuclear weapon. The message sounded like a warning to potential coalition partners. “We can talk about you joining the government, but Iran is my red line.”

Mr Netanyahu has encouraged and contributed talk of a possible attack on Tehran's nuclear facilities, as other world leaders and even those in the Israeli security services have publicly doubted the wisdom of a strike.

A poll in August suggested more than 60 per cent of Israelis were against a conflict, without US support, and among Israeli leaders there is only lukewarm backing. The country's President, Shimon Peres, as well as the Chief of Staff of the Israeli Defence Force, and the head of Mossad are opposed to a strike. Today, the Russians became the latest to warn Israel not to act against Tehran.

Many Israelis, including Mr Peres, have also lamented Bibi's breakdown in relations with the US. Since its inception, Israel has counted on Washington as its biggest backer but relations between Barack Obama and Mr Netanyahu are sour. Mr Lieberman as Foreign Minister seemed to enjoy making visiting dignitaries squirm but several parties on the left and centre, including the Labor party and Tzipi Livni, have insisted on improved relations.

Attitude towards the Palestinians

Throughout the election campaign, Mr Netanyahu displayed a bellicose attitude towards the Palestinians, especially on the highly controversial issue of West Bank settlements.

While the issue was not top of most voters' priorities, a majority of Israelis still favour a two-state solution, and the parties that advocated a return to negotiations, largely did well.

Israel is proud of its democratic processes, but there were fears the election of a right-wing government, that included the likes of Mr Bennett, who openly campaigned against a Palestinian state, would set relations back years. That has not happened. With the centrist and leftist parties favouring greater dialogue with the Palestinians – Mr Lapid has been largely quiet on the issue but favours a two-state solution – they are hopes the close election result could kick-start the moribund peace process, which has stalled largely on the issue of Israeli plans to build more settlements in the occupied West Bank.

Not being right-wing enough

On his Facebook page, Mr Netanyahu said the election result showed that Israelis wanted him to continue as Prime Minister and “form as broad a coalition as possible”. Had the right-wingers won more seats, it would have been a different message. It may sound counter-intuitive to say Mr Netanyahu was not right-wing enough during the campaign, especially in light of the performance of the centrist parties. However, the Prime Minister lost 11 Knesset seats, precisely the number won by Jewish Home.

Visiting the Jewish settlement of Efrat as the polls opened, it was not difficult to find voters disillusioned with Mr Netanyahu. Many voted for Likud four years ago, but were attracted to Mr Bennett's radicalism.

If Mr Netanyahu is the pragmatist observers say he is, there is an argument he could have done better by appealing to the right, rather than allowing Mr Bennett to usurp his position.

Woman shot dead by soldiers in West Bank

A Palestinian woman was shot and killed by Israeli soldiers near Hebron in the West Bank today.

There were conflicting accounts of what happened, with witnesses saying that Lubna Hanash, 21, had been killed as she walked to a college in the al-Arroub refugee camp.

A spokesman for the Israeli Defence Force said that soldiers had come under attack from Palestinians throwing petrol bombs, and had returned fire. A second woman was injured in the incident.

The Palestinian Prime Minister, Salam Fayyad, called for “strong condemnation from the international community”.

Alistair Dawber

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