VZCZCXYZ0004
RR RUEHWEB

DE RUEHTV #0421/01 0501433
ZNR UUUUU ZZH
R 191433Z FEB 09
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC 0570
INFO RUEHXK/ARAB ISRAELI COLLECTIVE

UNCLAS TEL AVIV 000421 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PINR KDEM IS
SUBJECT: THE RESULTS ARE OFFICIAL AND THE COALITION COUNTDOWN 
COMMENCES 
 
¶1.  (SBU) SUMMARY:  The official results of the February 10 
elections confirmed that Kadima has a one-seat lead over Likud, 
established Yisrael Beiteinu Party (YBP) as the third largest party, 
and consigned the Labor Party to fourth place.  President Peres 
embarked on consultations with twelve parliamentary faction leaders 
on the evening of February 18 and aims to conclude these discussions 
within two days and announce which MK he will entrust with forming a 
government.  While Kadima recommended its leader Tzipi Livni to head 
a broad-based, centrist government and Likud recommended chairman 
Netanyahu, Yisrael Beiteinu leader Avigdor Lieberman surprised the 
pundits by recommending Netanyahu - with the recommendation that 
Netanyahu form a broad-based government starting with the three 
largest parties:  Likud, Kadima and Yisrael Beiteinu.  Given 
Netayahu's right-wing majority bloc, the President may not keep with 
tradition and give the leader of the party with the plurality 
(Kadima) the first opportunity to form a majority government.  This 
decision poses a considerable dilemma for Peres who is expected to 
move to a decision within a few days.  Peres by law must task a 
member of the Knesset by February 25 at the latest.  End Summary. 
 
------------------------- 
THE PARTY VERSUS THE BLOC 
------------------------- 
 
¶2.  (SBU) Kadima's slender victory - 28 Knesset seats to Likud's 27 
in the 120-member Knesset -- is not the sole source of Livni's 
vulnerability.  Despite its second-place finish in the elections, 
Likud is able to speak of a "camp" or "right-wing bloc" of support 
and has now garnered the endorsement of 50 members of Knesset -- 
excluding the conditional support of the leader of the Yisrael 
Beiteinu Party (YBP - 15 seats).  Netanyahu could form a narrow 
right-wing coalition of 65 with YBP support if he were able to 
reconcile their demands for a more secular state with those of the 
Haredi (ultra-Orthodox religious) parties.  Even without YBP, Likud 
has far more declared support from its allies in the 18th Knesset 
than Kadima, which has no allies at this time. 
 
¶3.  (SBU) Party endorsements, however, are only part of the scenario 
which the President must take into account.  The latest word on 
Labor's position is that they will endorse neither of the leading 
parties and will go into opposition, but this could change.  The 
left-wing Meretz, which ran on an anti-YBP campaign, says it will 
not endorse either the leader of Kadima or Likud, parties that 
Meretz fears will reach out to YBP.  The same may be said of the 
three Arab parties.  Israel's real-politik dictates, however, that 
what the party leaders say to the president and what they do once 
coalition talks commence may be unrelated. 
 
------------------------------------------- 
LIEBERMAN & COMPANY: POWERBROKERS UNLIMITED 
------------------------------------------- 
 
¶4.  (SBU) Two days after the polls closed on February 10, the YBP 
leader Avigdor Lieberman left Israel for vacation in Byelorussia. 
His right-hand man, MK Stas Misezhnikov - most recently the chairman 
of the Knesset's powerful finance committee, moved swiftly to stake 
out YBP goals.  Before any coalition contacts commenced, the YBP 
submitted a list of demands to Likud and Kadima regarding civil 
marriage and citizenship.  The media had barely digested the 
maneuver before Livni had phoned Lieberman to inform him of her 
agreement to all his terms, sparking major speculation that a 
Livni-Lieberman alliance was in the making.  The coalition 
arithmetic, however, still fell short.   Most commentators have 
argued that if Peres were to task Livni with forming a government 
she would fail just as she did after winning the Kadima primaries in 
September 2008. 
 
¶5.  (SBU) On February 19, Lieberman confounded all the pundits' 
predictions that he would not recommend anyone to the President (or 
perhaps recommend himself), by endorsing Netanyahu, while urging the 
Likud leader to form a broad-based government that starts with the 
three largest parties.  "Bibi (Netanyahu) needs to get used to the 
idea of a broad-based government rather than a narrow one," 
Lieberman told reporters, adding: "and Tzipi (Livni) needs to get 
used to the idea that there won't be any rotation."  (Note:  There 
has been much speculation regarding whether Livni and Netanyahu 
would repeat the power-sharing precedent established by Shimon Peres 
and Yitzhak Shamir, who each served two years as PM during the early 
1980's.  Livni has been open-minded about such a prospect, but 
Netanyahu rejected it.) 
 
------------------------------ 
THE PRESIDENT'S DEFAULT OPTION 
------------------------------ 
 
¶6.  (SBU) Much as President Peres may wish to keep with tradition 
and offer the task of forming a government to the leader of the 
largest party, he is not required to do so by law.  Netanyahu's 
Likud, at the last count, has the support of Shas with 11 seats, the 
Jewish Home party's 3, and the National Union's 4.  Having agreed to 
 
most of Yisrael Beiteinu's platform demands in general terms, and in 
light of Avigdor Lieberman's recommendation to the President, Likud 
may now add their 15 seats and even 5 from United Torah Judaism 
(UTJ) -- if Netanyahu can square the circle between YBP's insistence 
on civil marriage legislation and the vehement opposition of Shas 
and UTJ. 
 
------------------------------------------- 
LABOR: DOWN BUT NOT ENTIRELY OUT OF THE GAME 
------------------------------------------- 
 
¶7.  (SBU) Lieberman's man-of-the-hour status is misleading. There 
are more than three parties with a stake in the political game and 
the paradox of Israeli politics is that often significant power at 
the top depends on maintaining control of several small (often 
ideological or single-issue) players at the base of the pyramid. 
One of the largest of the smaller players is the Labor party which, 
according to its chairman Ehud Barak, is destined for the opposition 
benches.  The record shows, however, that when coalition 
negotiations commence, Labor is always loathe to enter the political 
wilderness of the opposition.  Labor should not be ruled out as a 
possible coalition partner, and Netanyahu has made clear that Barak 
remains his top choice for Defense Minister. 
 
-------------------------- 
SHAS:  PROMISE US THE MONEY 
--------------------------- 
 
¶8.  (SBU) Shas preserved its 11 seats in the 2009 elections, but has 
less leverage now than it did in the fall of 2008 when it blocked 
Livni's efforts to form a government after she failed to promise 
sufficient money for child allowances demanded by Shas.  Shas, like 
Labor, abhors the opposition, and has endorsed Netanyahu.  But Shas 
is also supportive of including Kadima in a broad coalition 
government.  On the peace process, Shas' opposition to negotiations 
on Jerusalem put them more squarely in the Likud camp than in 
Kadima's (as this was the other key issue that led to Livni's 
failure to form a government with members of the 17th Knesset in 
2008).  Yisrael Beiteinu's demands are problematic for Shas (and 
UTJ) but do not necessarily rule out compromise. 
 
--------------------------------------------- ---- 
THE PRESIDENT'S CHOICE IS THE PEOPLE'S PREFERENCE 
--------------------------------------------- ---- 
 
¶9.  (SBU) President Peres is no longer a member of the Knesset, but 
he still retains the unofficial title of Israel's oldest and most 
experienced parliamentarian.  He will bring all his skills and very 
substantial historical memory into play over the coming days.  He is 
devoting two days to consultations with the 12 faction leaders whose 
parties crossed the two percent threshold of the popular vote to win 
seats in the Knesset.  The latest reports indicate that Peres will 
announce his choice of which party leader is to form a government 
early next week. It is not beyond the authority of the President to 
suggest to Netanyahu and Livni that they engage in dialogue -- 
something they have so far avoided - and there are already press 
reports that indicate the President may summon Livni and Netanyahu 
to private meetings on February 20.  However, the law does not 
permit the President to engage in any way in the process of the 
formation of a government.  Amid considerable anticipation that the 
President may call on Kadima and Likud to form a government together 
or agree to a power-sharing system of rotational leadership, the 
President has been cautious in his statements, saying only that he 
intends to "comply with the people's desire and the people do not 
want me to impose anything." 
 
----------------------------- 
BRINKMANSHIP VERSUS THE CLOCK 
----------------------------- 
 
¶10.  (SBU) If the statements of Tzipi Livni are anything to go by, 
she has made it clear that the only scenario in which she would 
contemplate collaboration with Netanyahu is in the framework of a 
government she will head.  In a first reaction to Avigdor 
Lieberman's recommendation of Netanyahu to the President and his 
call for a broad-based government, Livni said:  "Kadima and I have a 
plan of action ranging from advancing the peace process to fighting 
terror and domestic issues that require fixing and I'm not about to 
change any of it and I will not provide a fig-leaf for a government 
of diplomatic paralysis.  That's what I have said and that's how I 
plan to proceed."  Commentators are already interpreting this as a 
Kadima ploy to raise the negotiating stakes, and perhaps in this 
vein Livni and fellow Kadima members announced on the afternoon of 
February 19 their intention to head to the opposition.  Netanyahu, 
for his part, has said he will invite Kadima to join his government 
after he has knitted together his right wing.  The two positions 
would appear to be mutually exclusive, and this creates an 
opportunity for the President to encourage the two contenders to 
work together.  The deadline established by law gives the first 
candidate designated by the President a maximum of 42 days to put a 
 
coalition together. 
 
CUNNINGHAM