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Will Israeli Politics Set Back Peace Process?

Israelis are facing political gridlock.

Foreign Minister Tzipi Livni's Kadima Party has a one seat lead over the Likud Party, led by former Prime Minister Benjamin Netanyahu.

Neither party alone is close to having a majority in the 120-seat Knesset and both leaders are jockeying to form a coalition government.

Both Ms. Livni and Mr. Netanyahu claimed victory after the election and both want to become the country's next prime minister.

Israeli President Shimon Peres will decide which leader will have the opportunity to form the new government. Whoever he chooses will have 42 days to accomplish the task.

"Israel is actually, I think, entering uncharted waters for the first time in its 60 year history," he said.

David Makovsky is Director of the Project on the Middle East Peace Process at The Washington Institute for Near East Policy.

He pointed out that nationalist and religious parties, including Likud, have captured 65 seats in the 120 member parliament, which appears to be an advantage for Mr. Netanyahu.

"The moderates have been hurt because of Hamas bombs. I know there will be people who disagree with me, but I will say I really think Hamas helped elect the right-wing parties," he said.

Ms. Livni supports the creation of a Palestinian state alongside a secure Israel. Mr. Netanyahu has promised to crush Hamas militants who control the Gaza Strip and he is cautious about conceding territory to the Palestinians.

David Makovsky said that following Israel's recent war with Hamas in the Gaza Strip, there is unlikely to be significant progress in efforts to push the peace process.

"Hamas has set this thing back for a long time. Even if Livni forms the government, I do not see any Israeli government that could do a grand deal on the Palestinian issue," he said.

While some analysts see the Israeli elections as a setback to peacemaking with the Palestinians, others see Iran's nuclear program as a more pressing issue.

U.S. President Barack Obama has indicated a willingness to negotiate with Tehran, while the Bush administration rejected direct engagement and accused Iran of trying to produce nuclear weapons - a charge Tehran denies.

Robert Satloff, the Executive Director of the Washington Institute for Near East Policy, said this potential change in strategy will affect relations between the United States and Israel.

"The key initiative, the key diplomatic change that the Obama administration is going to be undertaking is, quote, 'tough diplomacy on Iran'. It is on this issue, far more than on the important issues of Israeli-Palestinian peacemaking, it is on this issue that the clock is ticking," said Satloff.

President Obama has appointed former U.S. Senator George Mitchell as his special envoy for the Middle East.

Secretary of State Hillary Clinton has pledged an ongoing high-level effort to achieve peace between Israel and the Palestinians.

Michael Oren, a Middle East specialist at Georgetown University's School of Foreign Service, said there will likely be tension between the Obama administration and a new government in the Jewish state.

"Israel, under any government, even under a centrist government, but certainly under a more right-of-center government is on, if not a collision course, certainly on a friction course with this administration," he said.

Palestinian President Mahmoud Abbas said whoever ends up leading Israel is obliged to continue peace talks and meet international obligations.