Netanyahu is between a rock and a hard place

As Israel's polititians continue to negotiate a new government it is woth reading Haaretz for a quick analysis of what the parties have to confront.

For Netanyahu if he resolves to form a governemnt with the right wing parties

such a coalition would come with a threefold cost: It would face heavy international pressure to resume the peace process and stop settlement construction, it would bloat the budget with financing for the ultra-Orthodox parties' demands, and it would suffer from internal tensions between Lieberman and Shas.

whereas if he brings Kadima and even Labor into the government,then whilst he would be deprived of ideological zeal it would

reduce the extortionary power of Lieberman and the religious parties, and free himself of reliance on the extremists of the National Union. Such a government would reduce international pressure on Israel a little.

Too close to call in Israel

With exit polls giving the centrist party Kadima a one seat lead of centre right Likud,both parties are claiming victory in the Israeli election.

It is a victory of sorts for Tzipi Livni's Kadima who have been trailing in the run up to polling day

However the strong showing of other right wing parties means that Livni will find it difficult to form a government.

The complicated proportional representation system means that it could be more than a month before we know the full shape of the countries next government.

As it stands the result may well be seen as a setback for Barack Obama's ambitions for new peace initiatives as the shift to a right wing leaning will undoubtedly give Binyamin Netanyahu, the Likud leader,a role in future negotiations