Rival leaders court the 'kingmaker of the right'

Both claiming to have won Israel's general election, foreign minister Tzipi Livni and Likud opposition leader Benjamin Netanyahu yesterday each began intensive efforts to court the hard-right populist Avigdor Lieberman as a coalition partner.

Mr Lieberman has emerged as one of the main beneficiaries of Tuesday's vote, with a probable 15 seats and considerable power to make or break each leader's chances of forming a government. He met each of them in Jerusalem yesterday, without committing to either.

His apparent indispensability casts serious doubt on whether any government capable of negotiating a peace deal with the Palestinians can emerge from the current political imbroglio.

His support is indispensable especially to Ms Livni, who faces a much tougher battle to form a workable government, despite her impressive personal showing in keeping the centrist Kadima party intact.

Most analysts believe that Mr Netanyahu has a significantly better chance than Ms Livni of becoming Prime Minister. Even if it is not his preference, he should be able to form a government from the right-wing bloc which will now command a majority of the Knesset's 120 seats.

With 99 per cent of the results in (leaving only military and absentee ballots to be counted before this afternoon) Ms Livni, who unlike Mr Netanyahu is pledged to continue talks on a peace deal with the Palestinians, had won 28 of 120 Knesset seats in Tuesday's vote, with Likud at 27 seats.

Mr Netanyahu has little interest in negotiations on a "final status" deal with the Palestinians. Ms Livni is likely to find herself heavily constrained if she depends for survival on Mr Lieberman – and possibly, despite its stated preference for Mr Netanyahu, on the right-wing ultra orthodox party Shas, which now has 11 seats.

On the pronounced shift to the right demonstrated by the election results, the prominent Haaretz commentator Aluf Benn said yesterday: "The Obama message of new hope and new energy in the peace process failed to reach Israeli voters."

Although Mr Lieberman suggested early yesterday that his preference was for a right-wing nationalist coalition, he indicated he would keep talking to Ms Livni, who is likely to offer concessions towards his aspirations for reforms leading to a more presidential system of government. Ms Livni also broadly shares Mr Lieberman's broadly secular outlook.

She said after her meeting with Mr Lieberman: "The public decided and established who it wants to see as the prime minister. This is an opportunity for unity that can promote the issues that are important to you as well."

But she also faces strong opposition to sitting in a coalition with Mr Lieberman from within other potential coalition partners she needs on the(severely diminished) left. The Ynet news service yesterday reported that Ehud Barak, leader of the Labour Party, which crashed to a record low of 13 seats in the election, had told his parliamentarians he now envisaged the party going into opposition.

Mr Lieberman, who wants to reduce the number of Arab Israeli citizens, and fought his campaign on his proposal for a "loyalty" test for Israeli Arabs, left Ehud Olmert's coalition in January in 2008 in protest at its negotiations with the moderate Palestinian leadership in the West Bank. While he does not oppose two states in principle, he is likely to be a formidable brake on such negotiations in the foreseeable future. He also made clear in his post-election speech that Hamas would have to be "toppled" by any government he joined.

Mr Barak's stance – if reinforced in practice – would also be a blow to Mr Netanyahu's aspiration to widen the base of his government beyond the right – not least in the hope of establishing better relations with the new US presidency. Mr Benn said yesterday that the Likud leader's main regret about Mr Netanyahu's previous premiership from 1996 to 1999 was that he had not brought Labour into his coalition. Narrow right-wing support, said Mr Benn, would increase pressure on Mr Netanyahu "to build more settlements, use force. He is afraid of that – how afraid, I don't know".

With both parties seeking urgently to build coalitions which can last for a whole parliament, spokesmen for both Likud and Kadima were quick to reject the idea of a rotating premiership – as took place after the 1984 election. The proposal might be one way that President Shimon Peres, a founder member of Kadima and advocate of a two-state solution, could bring Ms Livni to power when he selects a party leader to form a government next week.

"There won't be a rotation," Silvan Shalom, the former Likud foreign minister told Army Radio. "That method is chosen when there is a 60-60 balance between the blocs, and that just is not the case now. The victory is clear." As debate continued among commentators on the possibility of a rotating premiership, Kadima minister Meir Sheetrit said: "A rotation is a bad thing, a kind of experiment to square out the round... I suggesting we stop experimenting on the state."