Israel’s Elections: Can This Batch Do Peace?

They used to say of Italy’s coalition politics, when governments collapsed on a regular basis, that they were “hopeless but not serious.” In Israel, after Tuesday’s elections, the reverse holds true.

Even though the right-wing bloc won a majority and a hard-liner has become the kingmaker, it is premature to declare the end of the two-state solution and the death of the Middle East peace process.

There are three reasons to believe that all is not lost: 1) the surprising strength of Tzipi Livni, head of the centrist Kadima party; 2) the searing experience of Benjamin Netanyahu’s last term as the head of a right-wing Likud government, and 3) a closer scrutiny of Avigdor Lieberman’s real positions on territorial compromise.

Livni, Netanyahu and Lieberman were the big winners in the election. Livni’s comeback in the last days of the campaign put her Kadima party in first place. Even though the Labor Party’s poor fourth-place showing will make it impossible for her to cobble together a center-left majority in the Knesset, she cannot be ignored in the horse-trading that has already commenced.

If Kadima is nevertheless left outside, the resulting right-wing coalition would govern with a slim majority, giving any of the three smaller parties the ability to bring the government down.

This would turn Netanyahu’s dream of returning to the prime minister’s office into a nightmare. He is well aware of that – he told me recently that he regarded it as a mistake not to have formed a national unity government with Shimon Peres, then leader of the Labor party, whom Netanyahu narrowly defeated in 1996.

With small, right-wing parties holding him hostage to their demands, Netanyahu would have no choice but to increase settlement activity and stall on any peace process that would require him to give up West Bank territory.

The last time he was in that position, he first ruined his relationship with President Bill Clinton, and then, when he conceded a small piece of the West Bank to try to win Clinton over again, his coalition collapsed. In the election that followed in May 1999, Netanyahu was defeated by the Labor party.

This time around, Netanyahu knows he will be dealing with an immensely popular American president who has made resolution of the Israeli-Palestinian conflict a priority. And Obama has appointed George Mitchell as his Middle East peace envoy.

Netanyahu surely recalls that in 2001, the last time Mitchell involved himself in the conflict, he came out recommending a freeze on settlement activity, “including natural growth.” That was the loophole Netanyahu used to continue expanding settlements.

This means that if Netanyahu forms a narrow right-wing government he would likely be caught between U.S. demands that he freeze settlements and cede most of the West Bank to achieve a two-state solution, and resistance from his coalition partners to any territorial compromise.

Without the counterweight of Livni’s Kadima in his coalition, Netanyahu’s life as prime minister will be miserable and short-lived.

Lieberman, a Russian immigrant who served as Netanyahu’s office director when Netanyahu was prime minister, also needs Kadima, because his Yisrael Beteinu party cannot sit easily in a government that includes religious parties.

Lieberman’s Russian base is decidedly secular, as negative on the religious parties as it is on the Arabs. The Russian immigrants want civil marriages, liberal conversions and secular reform. Lieberman knows he can’t deliver on this unless secular parties like Likud, Kadima and Yisrael Beteinu hold the majority in the government.

Lieberman also needs Kadima to promote his solution to Israel’s conflict with the Palestinians. Unlike Likud and other right-wing parties, his approach is demographic, not geographic. He seeks as pure a Jewish state as possible.

He would give up most of the West Bank and the Arab suburbs of East Jerusalem to a Palestinian state so long as it also incorporated Arab towns in northern Israel in exchange for the West Bank settlement blocs that would be incorporated into Israel.

Lieberman’s solution is highly problematic because it would disenfranchise Israeli Arab residents of those Arab towns. That is not something Livni is likely to support. But it does not rule out either of them participating in a coalition government with the other; indeed, Lieberman was a member of Ehud Olmert’s Kadima-led government for more than a year.

Of course, coalition negotiations do not necessarily produce logical outcomes. But going into the negotiations, which will probably take several weeks, Netanyahu and Lieberman both have a strong interest in forming a government with Livni, in which their combined strength would give them a stable coalition of 70 seats in the 120-seat Israeli Parliament.

That may not produce an ideal Israeli partner for President Obama, but it will be one that – on Livni’s insistence – might at least be able to freeze settlements and cede West Bank territory should a capable and responsible actor emerge from the current Palestinian political crisis.

Even the worst-case scenario of a Netanyahu-led right-wing government could still produce a peace breakthrough – only with the Syrians rather than the Palestinians.

The last time he was in office, facing pressure from Clinton to deal with the Palestinians, Netanyahu tried to negotiate a secret peace deal with the Syrians in which, according to the account of his mediator, he agreed to cede all of the Golan Heights.

This was in the time-honored tradition of right-wing Israeli leaders – it was Menachem Begin who gave up the Sinai for peace with Egypt, and Ariel Sharon who evacuated Gaza to hold on to his settlements on the West Bank high ground.

Diverting Obama to the Syrian track while offering West Bank Palestinians what Netanyahu refers to as an “economic peace” would serve both Israeli and American strategic interests: It would cut the conduit of Iranian backing to Hezbollah, generate friction between Syria and Iran, put pressure on Hamas to reconcile and provide cover for Arab state engagement with Israel.

So before we all put on sackcloth and say kaddish for the peace process, we should bear in mind that as bleak as it often looks, as long as an American president keeps trying, something always turns up in the Middle East. And it’s not always bad.