It seems like the most interesting part of American elections happens before the voting, while the most interesting part of Israeli elections happens afterwards. In American elections, it's the polling and the speculation over possible electoral maps that arouses my inner nerd. But in Israel, polling is notoriously bad (case in point: this year) and there is no electoral map. Instead, post-election speculation over the coalition is where the fun is to be found.
So, without further ado, here is what I think is going to happen:
It is very clear at this point that Netanyahu has the best chance of forming a coalition, so presumably President Peres will give the task to him. Although he is currently supposedly courting Shas, I do not believe that Shas or any Ultra-Orthodox party will be part of the coalition. The reason is that Yesh Atid, the second largest party, has made conscription of the Ultra-Orthodox a major part of its platform, and therefore probably cannot coexist in a coalition with any Ultra-Orthodox party. And if Netanyahu cannot get Yesh Atid (or any party to its left) into the coalition,
So what will Netanyahu do instead? Presumably, he'll ditch the Ultra-Orthodox and their 18 seats and replace them with Yesh Atid and its 19. That gets him to
Of course, there are other possibilities, but at the moment, what I have described seems very likely (everything that I have said is consistent with the conventional wisdom). If things actually play out this way, how is the next Israeli government likely to act?
Well, the Ultra-Orthodox community can kiss its draft-exemptions good-bye. This is the single most likely piece of legislation to pass if the coalition turns out the way I expect. Indeed, the fact that the coalition could pass such a law is presumably a major reason that the option of forming this particular coalition will appeal to all of the parties involved. This would constitute a major step on a very serious issue that has divided Israel for a long time. It is hard to imagine that any other conceivable coalition could pass legislation as significant as this with any ease.
On the economy, it seems that there could be points of agreement around strengthening the middle class, although I am not sure exactly what this would look like.
But of course, this is Israel, and everything comes down to the Israeli-Palestinian conflict. On that front, we are not going to see the extreme rightward shift that many expected to result from this election. On the other hand, I doubt that we are going to see much change, either. The coalition would simply be too divided between hard-liners and moderates to accomplish anything serious. Similarly, it now seems much less likely that Israel will attack Iran, since there will simply be too much opposition within the coalition.
One final note: I expect that this government will be fairly weak and divided despite achieving Hareidi conscription, and might not last very long. If new elections are called withing the next two or three years, you heard it here first.