Despite losing about a quarter of its seats in Tuesday's election, Prime Minister Benjamin Netanyahu's Likud-Yisrael Beiteinu will remain the largest faction in the next Knesset. And although he is weakened, Netanyahu will almost certainly retain the premiership. Nevertheless, in the days ahead, he will struggle to build a governing coalition -- the meteoric rise of Yesh Atid, the party led by the populist anchorman-turned-politician Yair Lapid, left the Knesset almost equally divided between a right-wing and a center-left bloc. The prime minister might have to opt for more centrist partners than he would normally prefer.
Such an outcome reflects the realities of Israel's political discourse: Netanyahu is no longer as popular as he once was, but the center-left has also failed to serve up a viable alternative. Whatever Netanyahu's shortcomings, under his stewardship Israel mostly avoided being swept into the global financial morass, and its security situation stabilized despite a deadlocked peace process. No center-left leader could claim those achievements. Labor's new head, Shelly Yachimovich, revitalized the party but not enough. The promising former head of Kadima, Tzipi Livni, who ran as the leader of a new party, had little to show for herself other than a series of failures in both the government and the opposition.
At the same time, the electorate is aware that the next government will have to face a series of challenges beyond its relations with the Palestinians, and most Israelis expressed doubts as to whether Netanyahu could handle them on his own because his administration failed to address these issues in the last few years. Israel is also facing serious decisions about its economic policies. The outgoing government could not agree on next year's budget, which will have to entail both far-reaching cuts in services as well as raises in taxes. The next government must also respond to increasing frustration about social and economic inequality. Similarly, it will need to make some difficult decisions concerning relations between the country's rising militant religious sector and