New look for the Israeli centre

It should probably not be such a surprise that the Yesh Atid Party came from nowhere to win 19 seats and finish second to the ruling Likud-Beitenu coalition in the Israeli general election.

What many commentators seem to have overlooked is the demise of the centralist Kadima Party which just three years ago was the majority governing party in the Knesset. It lost all but two of its 21 seats. Yesh Atid, also a centralist party, went from nil to 19. Do the arithmetic – the centralists have not suddenly appeared out of nowhere, they have simply changed horses.

The question that should be asked is why did voters turn to this unknown quantity rather than stick with Kadima or Tzipi Livni's Hatnuah Party, which also espouses middle-of-the-road policies. At this point we should pay tribute to the charismatic Yesh Atid leader, Yair Lapid.

During the poll Lapid, the son of Holocaust survivor and former Deputy Prime Minister Yosef 'Tommy' Lapid, stuck closely to economic issues which are increasingly concerning Israel's middle class, rather than the traditional parties' preoccupation with security, the Palestinians and the two-state solution.

While Netanyahu was talking about Iran's nuclear program, Lapid called for an end to military exemptions for young ultra-orthodox Jews, better public education and a reversal of ever-rising taxes that he said were crippling the middle class and stifling enterprise.

Kadima, itself formed only in 2005 by former Prime Minister Ariel Sharon, was an attempt to impose centralist policies from the top down and never quite lost the tag that it was simply a reshuffling of the old guard. In contrast Yesh Atid is a truly grassroots movement with a new and refreshing appeal rooted in its very name which in English means Party of the Future.

The poll also highlighted a split within the Israeli community, of which most citizens are well aware, but international observers have largely ignored. Most of Yesh Atid's support came from Tel Aviv and surrounding areas, while Likud and the religious parties have their power base in the capital, Jerusalem.

As an American currently living in Israel pointed out to me: "You can drive from Jerusalem to Tel Aviv in well under two hours, but it is like entering another world."

"In Jerusalem you see the ultra-orthodox in their traditional black coats and hats at every turn; they have taken over whole neighbourhoods of the city which are virtually no-go areas for tourists and secular Israelis. While in Tel Aviv everything is laid back and beach culture, just like any other Mediterranean coastal city."

The other thing that surprised her was that a full third of Israelis have never visited Jerusalem. "That's amazing in such a small country, but people simply don't seem to be interested."

Prime Minister Benjamin Netanyahu's coalition, which lost 11 seats, appears to have been caught on the wrong side of history. It remains the largest grouping in the Knesset, but in the maelstrom of Israeli politics, the largest party does not always get to form the government. However, Lapid set the agenda for initial coalition negotiations by saying he would not join an anyone-but-Netanyahu alliance simply to kick the Prime Minister out of power.

That rather puts the ball solidly into Netanyahu's court. He can either drag his coalition further to the right in alliance with the Jewish Home Party and various religious groups. This would spell a virtual end to negotiations with the Palestinians and hopes of a two-state solution. It would further isolate Israel internationally and do nothing to improve security.

Or he can reach out to Yesh Atid, the Israeli Labor Party and Hatnuah to form a government of the centre which would have a handy majority in the Knesset, but might come to grief down the track over the old Palestinian bugbear.

Lapid has deliberately kept his policies vague in this area. In general he is in favour of resuming talks with the Palestinians and a Palestinian state, while retaining the large West Bank settlement blocs under Israeli control, and opposing any division of Jerusalem.

That might be enough to satisfy most of Netanyahu's more right-wing adherents, while leaving the door slightly ajar – as it is always slightly ajar in Israeli politics – to further compromises in the future.

Within hours of the poll, critics of Yesh Atid were gathering. Lapid has been described as vapid, without firm policies, and on the Palestinian question little more than a Netanyahu clone which the experienced Prime Minister will easily be able to manipulate if they go into coalition together. Certainly Lapid has to prove himself, but there is nothing in his actions and pronouncements, during the campaign or since, that suggests he will be anything other than his own man.

The result will be seen with some satisfaction in Washington. The Obama Administration will still have to deal with Netanyahu – it was already prepared for that – but it will be with a Prime Minister unexpectedly chastened by a loss of seats and prestige, and quite likely backed by a coalition that will insist he be less hard-line than in the past.

Hopefully this will mean the two allies will once again be able to resume meaningful discussions rather than the dialogue of the deaf that has characterised their exchanges over the past couple of years.