A month ago the Likud won the Israeli elections and Pres. Shimon Peres chose Benyamin Netanyahu to form the next government.  The Likud did not gain the most seats in the Knesset but rather their right wing faction was the only one with the choice of establishing either a center-right coalition with Kadima as their major partner or a hard line right/religious government which would include bringing in four to five other parties.  

Many (including this commentator) expected Kadima's chairwoman Tsipi Livni to respond positively to Netanyahu's overtures for a center right coalition but in direct discussions between the two no agreement emerged.  Rather Livni is portrayed as desperately wanting to lead the opposition while Netanyahu is understood to want a "unity government" but not willing to make compromises on policy substance to ensure an agreement.  The major stumbling block is the demand by Livni that Netanyahu and the Likud publicly recognize "two states for two peoples" as the basis for a permanent status agreement with the Palestinians.  Netanyahu speaks of "self-rule" for the Palestinians but falls short of endorsing a Palestinian State.  Former PM Ariel Sharon and outgoing PM Ehud Olmert along with Livni have endorsed the two state solution.  All three are from Kadima and broke with the Likud over this very issue (and the Gaza-northern Samaria Disengagement) in the 2006 elections.  Apparently no semantical acrobatics can overcome the disagreement, or maybe no one cares to try too hard.

Netanyahu is in a difficult position:  To adopt a two-state solution would obliterate the differences between the Likud and Kadima as the Likud would move to the center and be seen as selling out their electorate.  Trying to build a Right/Religious coalition will guarantee paralysis on many fronts as the ultra-orthodox (haredi) parties of Shas and United Torah Judaism (UTJ) will demand massive funding for yeshivas and subsidized housing while continuing to obtain as many military draft deferments as possible – all very unpopular with the mainstream Israeli public.  Furthermore, the National Union and Jewish Home factions (offshoots of the modern orthodox national religious movement) are pushing for legalizing "illegal" settlements and the development of many more in the West Bank (Judea and Samaria).  This will cost a fortune, not only in funding from constantly shrinking state revenues, but in political/diplomatic capital with the US, Canada and the EU, all of whom support Israel but demand a two-state solution.  Netanyahu's "economic peace" and "self-rule" do not go far enough for any of the above mentioned international players.  He had hoped to paper over the differences with Kadima and Avigdor Leiberman's Yisrael Beitainu but Livni wants a clear cut endorsement of Kadima policy, not "constructive obfuscation" in the words of Henry Kissinger.

As if this is not bad enough, US Sec. of State Hillary Clinton has been to Israel with a mission statement from Pres. Obama that the "two-state" solution is the only way.  Washington also wants a Likud-Kadima agreement.  Netanyahu is a follower of Revisionist ideologue and founder, Zev Jabotinsky who made it clear that one never compromised unless there was absolutely no choice.  Furthermore, Jabotinsky made it clear that the Jews as a small nation would need a patron to survive, a role the US has filled for decades.  Writing in the 1920s and 30s Jabotinsky made two cardinal points. Firstly, one should not get in the way of the patron's vital interests and second: an agreement with the Arabs could be made in the future when they no longer could hope for Jewish elimination.  What direction does one take when certain Arabs as represented by Fatah are said to be willing to come to conflict resolution with the Jewish State while others (Hamas, Moslem Brotherhood, etc.) demand Jewish destruction?  What happens when the patron views Netanyahu's non-acceptance of the two-state solution as undermining its own foreign policy?  And what of a bi-national state signaling a territorial "victory" but a demographic defeat?  When Jabotinsky wrote 70 to 90 years ago he envisioned a Jewish majority in all the Land of Israel (including Jordan) and there was no Jewish State to be lost in the demographic battles.

Jabotinsky could afford to be an ideologue while Netanyahu is a politician attempting to be a statesman.  The bottom line was that one compromised or accepted an unpleasant reality when there was absolutely no choice.  This was written concerning the Arabs in "The Iron Wall" (1923) and hence the principle flows equally for all.  In the Wye Accords (1998) Netanyahu conceded territory to Yasir Arafat in the Land of Israel (west of the Jordan River) when he had no options remaining.  Today have Netanyahu and the Likud come to the new baseline of the "two-state solution"?

Like Netanyahu, Tsipy Livni comes from a Revisionist family and knows the Jabotinsky rules.  The question is whether she and Kadima will do Israel major international damage by forcing Netanyahu into a hard line Right/Religious coalition which essentially the Israeli public does not want.  The thinking is that Kadima will be the party of power after the massive diplomatic, economic and social failures of such a coalition.  Would it not be better to battle from the inside?  After all, Netanyahu is no fool, or must he be humiliated first and left with "no choice"?

Most commentators see a Right/Religious coalition as the only option because of Kadima's stance and Netanyahu's rejection of a definitive "two-state solution".  But let us not forget, the US patron may very well have the last word – a Likud-Kadima agreement embodying a "two-state solution" in one form or another either now or at a future date.  Any Right/Religious coalition can expect some tough times in US-Israel relations.