01/22/2013 04:42 pm ET Updated Mar 24, 2013

Welcome the Winner/Loser Benjamin Netanyahu

Exit polls in Israel are usually a reliable reflection of the real results, so judging by these polls PM Netanyahu's Likud-Beitenu party ended up, as expected, the largest single party in Israel. So far so good for Netanyahu? Far from it. The PM suffered a major defeat -- there is no other way to describe the loss of at least 10 seats, despite the merger with his Foreign Minister Avigdor Lieberman's party. Moreover, the results indicate that it is almost politically impossible to establish a new coherent governing coalition, and doing that was the oft-stated goal of the campaign, which was initiated ahead of time by Netanyahu himself.

In fact, the current campaign may prove to be just the prelude to a new campaign, sometime in 2013 or early 2014, and Netanyahu can't be sure that following the clobbering he took today, he will be the candidate for PM in the next elections. So, this may prove to be a Pyrrhic victory for the veteran, though still young, politician. And it is not just a personal humiliation for him, it may be the beginning of a realignment of Israeli politics, and with it the end of the Likud party as we have known it until now.

The overall trend in this election was towards two new rising stars. One, Naftali Bennett, who is to the right of Netanyahu (whose meteoric ascendancy was predicted here), may end up with a gain of six-eight seats, all at the expense of Likud; and the second, Yair Lapid, leader of the Yesh Atid party [We have a future], who is the embodiment of the center in Israeli politics. Lapid is slated to come as second, and he represents an interesting ideological bundling, which may seem odd in the U.S., but not in Israel. Lapid is hawkish on security matters, dovish on the Palestinian issue, very conservative on economic policy, liberal on social questions, and very strongly opposed to the influence of religious parties. Altogether a blend which firmly places him in the very center of Israeli society and politics. Whereas Bennett is firmly on the right side.

The fact that Likud lost so heavily to the right is an indication that for the first time since the historic victory of Menachem Begin in 1977, many religious-Zionist voters left Likud and came back to their mother party, the National Religious party, now called, under Bennett, the Jewish Home. Religious voters were one of the solid blocks of voters which traditionally supported Likud. Not having them in the bag is very bad news for the Likud party. Likud still has quite a few MK who can easily fit into the Jewish Home. Add to this the fact that Netanyahu does not automatically command the loyalty of the MK who are members of Lieberman's party and we get a PM whose wings are clipped. Titular PM, but with much reduced political clout.

What dramatizes the Likud defeat is the loss of votes to the Lapid movement, which drew support from the Russian-based Lieberman party, which is nationalist, but secular and fearful of the power of the Orthodox establishment. When Lieberman went to the merger with Likud, he antagonized many of his own voters, who feared that the united bloc would follow on the Likud line of an alliance with the religious and ultra-religious parties. Many people from the former Soviet Union, firmly in the right wing column on foreign policy issues, deserted the right this time over the fear from these religious parties. Lapid also gained from the removal of liberal, moderate politicians such as Dan Meridor and Benny Begin from its list of candidates.

Another interesting result of the elections is the relative failure of the Labor Party, which may gain some seats, but failed to establish itself as the alternative to Netanyahu. The party adopted a leftist platform on socioeconomic issues, but refrained from a very strong advocacy of dovish foreign policy. The result was that those voters who have the two-state solution as their first priority turned to ultra-left Meretz party. Altogether, the left remains weak, and beyond rejoicing at the defeat of Netanyahu, they have very little to cheer about.

So, the big question for Benjamin Netanyahu is: quo vadis? What government is he going to form? It can't be the old religious-right coalition, which failed so miserably. A coalition with the center and left is also politically impossible, and a national unity coalition consisting of Likud, Lapid, Bennett, the Labor party and the ultra-Orthodox Shas party is possible mathematically, but not so likely politically. So, adios to the elections of 2013, welcome the elections of 2013... Israeli democracy at a moment of crisis!