Benjamin Netanyahu has secured enough support to build a coalition government, though he may yet extend an offer of collaboration to his left-wing opponent after Barack Obama indicated in an interview with the Huffington Post that the US would find it "difficult" to back a hard right Israeli administration.
Netanyahu has won the support of crucial centrist party Kulanu, led by a former Likud colleague Moshe Kahlon and bitter rival of the prime minister. Israel's ceremonial president, Reuven Rivlin, has been meeting with the parties in parliament to hear their recommendations before appointing who will form the next coalition government.
With the support of ultra Orthodox parties, and right-wing nationalists and settlement-supporting parties like Jewish Home, Netanyahu has the requisite 61 seats to form a governing coalition, and may yet have even more, if the far right Yisraeli Beitanu party gives its backing, as expected, later today.
“We nominate Netanyahu and the broader the base of the coalition the better it will be for all of us,” Kahlon, told the Jerusalem Post.
The centre-left Zionist Union, the Arab List, the left-wing Meretz party and the centrist Yesh Atid have all declined to support Netanyahu. Eitan Cabel, a senior leader of the Zionist Union, which captured 24 seats to Likud's 30, told the president they had "no intention" of being part of a coalition.
"We see in Benjamin Netanyahu a dangerous person, he is dangerous to democracy," Joint List leader Ayman Odeh said.
But there is a slim chance that Netanyahu may yet extend a hand to ZU leader Isaac Herzog and party heavyweight Shelly Yacimovich, in order to avoid plunging US relations into yet further depths, though Israeli media has reported there are no offers currently on the table.
Haaretz reported that Obama's comments to HuffPost may be forcing a re-think inside Netanyahu's Likud camp.
The US President called out Netanyahu for his recent comment that there would be no Palestinian state under his leadership, saying that appeal to far-right voters had made it hard for people to "seriously believe" peace negotiations are possible.
As his re-election campaign looked shot last week, the Likud leader told a radio station that there would "indeed" be no Palestinian state under his watch.
"We continue to believe that a two-state solution is the only way for the long-term security of Israel if it wants to stay both a Jewish state and democratic," Obama said. "And I indicated to him that, given his statements prior to the election, it is going to be hard to find a path where people are seriously believing the negotiations are possible.
"We are going to continue to insist that from our point of view, the status quo is unsustainable, and that while taking into complete account Israel’s security, we can’t just in perpetuity maintain the status quo, expand settlements, that’s not a recipe for stability in the region."
"The [comments by Obama] made painfully clear that if he establishes a coalition government with the support of 67 MKs, including Habayit Hayehudi, Yisrael Beiteinu and the ultra-Orthodox parties, he sets himself on an immediate, fatal collision course with the entire international community, headed by the United States," the paper's Yossi Verter wrote.
HOW DOES THE ELECTORAL SYSTEM WORK?
Israel uses proportional representation - voters don't vote for a local MP, they vote for a party.
Then the party makes up a list of preferred candidates, and allocate them seats in parliament, the number of which is determined by the percentage of the vote the party receives.
Because of the sheer number of parties, no one ever wins an outright majority, so the government is made up coalitions. In practice, this means that governments rarely ever last a full four-year term.
The prime minister is usually the leader of the party that can form the first coalition which has a majority.
The parties with seats in the parliament are:
Likud: right-wing 30 seats
Zionist Union: centre-left 24 seats
Arab Joint List: coalition of Arab parties 13 seats
Yesh Atid: centrist, secular 11 seats
Kulanu: centrist 10 seats
Bayit Yehudi (Jewish Home): far right-wing, pro-settler 8 seats
Shas: ultra Orthodox 7 seats
United Torah Judaism: ultra Orthodox 6 seats
Yisrael Beitenu: right-wing nationalist 6 seats
Meretz: left-wing, green 5 seats
Rivlin is scheduled to meet with Netanyahu later this week and officially set the coalition talks into motion. The president himself has made clear his distaste for Netanyhu's pre-election that Arab citizens were voting "in droves" and endangering years of rule by the right-wing.
Rivlin told Likud representatives that the emerging government will have to serve "all the citizens of Israel, Jews and Arabs."
"We have been through a stormy and passionate election period — this is the time to begin a process of mending and healing in Israeli society," he said.