Israelis awoke this morning to political gridlock. Neither Livni nor Netanyahu won a large-enough percentage of the vote to govern effectively. Either, or both, will be forced into a complicated, tenuous coalition reality where they serve as a minority partner in their own government.

Even the notion of a shared national unity government involving both Kadima and Likud – an unlikely notion, but probably the least worst possibility – makes for a fragile and fuzzy result.

This is particularly distressing at a time when major decisions are required: on the diplomatic process with the Palestinians and Syrians, on the war front against Hamas and Hezbollah, in the looming confrontation with Iran.

The strengthening of the Israeli right-wing is an undeniable fact – even if Livni eked out a slim edge over Netanyahu – and this result surprised no one. But the divisions on the right, along with Livni’s impressive personal showing, means that Netanyahu will be unable to bring about the long-term conservative revolution in Israeli policy he had hoped for after 15 years of “Oslo-style” peace diplomacy.

Of course, Livni declared the vote a victory for Kadima. Given the utter unpopularity of outgoing Kadima leader Ehud Olmert; the failed war he led (in summer 2006 in Lebanon, of which Livni was part); and the outgoing government’s lackluster performance overall – Livni can honestly claim that her 28 seats are a great achievement.

 Of course, Netanyahu declared the vote a victory for Likud. Given that he started at the bottom of the barrel (Likud had only 12 seats in the outgoing Knesset); that Livni was coming off a popular and successful war effort against the Hamas; and that the Israeli media lobbied heavily for Livni, Netanyahu can honestly claim that his 27 seats are an impressive achievement.

But in reality, neither Livni nor Netanyahu won. They’ll be beggars in whatever coalition government is formed, dependant on too many other factions. This is not a good result for Israel.