At this point 99.7% of the votes have been counted in the Israeli elections. Sometime later today, I'll try to write a longer post with more analysis. At this point (albeit slightly different Knesset seat counts appear on different websites) a few things can be said (based on figures from this morning in the Jerusalem Post):
*There is no clear winner between Kadima and Likud, Kadima appears to have gotten 28 seats, Likud 27. Kadima has thus been able to position itself slightly under its 2006 result. Both parties claim to have won, both parties will try to form a governing majority. Lots of wrangling negotiations to follow, probably even worse than the horse-trading that torpedoed Livni's first attempt to form a cabinet in 2008.
*Far-right Yisrael Beiteinu came third (15 seats), a historic shift in Israeli politics. Party supremo Avigdor Lieberman has declared that he's willing to negotitiate with both blocs, as long as they can promise extensive bloodshed in Gaza and zero negotiations with Hamas.
*Labour Zionism has suffered a humiliating defeat. The Israeli Labour Party, for decades the dominating force of Israeli politics is now reduced to fourth position (13 seats). The Meretz party only got three seats. In the 1949 elections, Labour had 46 seats and Mapam (the Marxist-Zionist precursor of Meretz) had 19. Now the non-Zionist left (Hadash) is larger than the Zionist 'Left' (Meretz), a historic occurance. The shift to the right in Israeli politics is now sealed, and the last illusions on the pioneering Israeli socialism (that some Western leftists have nurtured after spending a vacation in a kibbutz) ought to be shed.
*There was an expectation that Arabs would increasingly boycott the elections in protest of the Gaza massacre. It seems that the rise of Lieberman in the polls reversed that trend to some extent. According to Jerusalem Post, the United Arab List (Ra'am)-Ta'al got 5 seats, Hadash (a joint Arab-Jewish front, led by the Communist Party) 4 seats and the National Democratic Assembly (Balad) 2. Ra'am-Ta'al and Balad have, combined, the same number of seats as in 2006 whilst Hadash has increased with one seat.
*Other results: Sepharhim Orthodox party 'Shas' comes fifth with 11 seats (down from 12), the Pensioners Party 'Gil' falls out of the Knesset (had 7 seats last time), United Torah Judaism 4 seats (down from 6). The far-right parties Jewish Home and National Union got 3 and 4 seats respectively (they had contested the 2006 election unitedly, getting 9 seats). The advances of Likud and Yisrael Beiteinu has weakened other right-wing parties.
*The remaining votes (0.3%) to be counted are those of diplomats, soldiers, seamen, prisoners and hospitals. Final results will be declared only on February 18. I won't guess how these 0.3% will incluence the outcome, but probably Arab parties will not be represented very well amongst them.
News links: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 Blogs: Svensson, Bildt, Anna W, Röda Malmö