In the end, Bibi Netanyahu will become prime minister. And, unfortunately, he will include neo-fascist Avigdor Lieberman in his government.
Tzipi Livni can take some personal gratification from her showing but, in the end, she can't make it.
Basically, one has to view the Israeli body politic as split into two camps, right and left. No matter that there are a few dozen parties. At the end of the day, every party that gains a seat in Knesset either leans right or left.
Today the right wing coalition won a clear majority. It is, I believe, inevitable that President Peres will give Netanyahu the first shot at forming a government and that Bibi will succeed.
Everything depends on Obama. It is the President, not the Prime Minister, who will determine what happens now. If Obama has the will -- and I think he does -- he can push Bibi to the peace table, just as Clinton did. And, drawing on Clinton's experiences with both Bibi and Barak, Obama can go all the way.
It is just a matter of will.