Israeli Election: Knife-edge vote leaves the world uncertain of prospect for peace

Netanyahu on course to lead right to power

The turning point came at 2am. The early exit polls showed a lead for the Prime Minister, Shimon Peres, of a shade more than 1 per cent over Binyamin "Bibi" Netanyahu, the right-wing Likud leader. In the Labour headquarters in Tel Aviv young members of the party waved their hands and chanted: "Hoo-ha, what happened; Bibi's blown it!"

In their headquarters depressed Likud supporters also believed "Bibi had blown it". One observer reported: "There is no clapping, a few of the young people at the back tried to shout 'Bibi, Bibi', but the politicians are standing at the front with impassive faces. I can see a woman crying." In the next few hours a number of Likud politicians may have permanently damaged their careers by premature criticism of Mr Netanyahu. "Do you think he should go home?" one Likud member of the Knesset was asked. "That's for him to decide," replied the politician. At the same moment some of Israel's better-known columnists were writing Mr Netanyahu's obituary.

Then Israeli television Channel One announced a new forecast poll, saying that Mr Peres and Mr Netanyahu were running neck and neck at 50 per cent each. It said a transfer of power was quite possible. The pollsters blamed the ultra- Orthodox for misleading their pollsters. In the neighbourhood from which Yigal Amir, the assassin of Yitzhak Rabin, comes, there was a blanket refusal to take part in exit polls.

Israel gradually began to realise Mr Netanyahu might have won after all. Out of 3.9 million votes he has a lead of only 20,000 and the postal votes of 154,000 soldiers, hospital patients, seamen, prisoners and diplomats have still not been counted.

Soldiers are much the biggest group and they have traditionally voted for the right. Leah Rabin, the widow of the murdered prime minister, said: "I am looking at where I keep my suitcases, and I feel like packing my bags, and flying away from here as quickly as possible. In my opinion, if a mistake was made, it was that not enough use was made of the terrible murder."

Many Labour supporters will agree. Mr Peres did not call an election after the murder, or use the wave of revulsion against the right. He seemed determined to win an election on his own merits. With the polls in his favour, he called an election six months early, but then saw his popularity plummet as four suicide bombers killed 59 people in Jerusalem, Ashkelon and Tel Aviv. In the final television debate last Sunday, which may have determined the outcome, Mr Netanyahu asked why Israelis "were afraid of letting their children ride on a bus."

What will Mr Netanyahu do now? He will have little difficulty forming a government. Although Likud lost seats he has potential allies in the newly emergent Russian immigrant party of Natan Sharansky and the religious parties, which had a triumphant night. The Arab parties did well, but the most important change was the strengthening of the right in the Knesset. At the same time, the extreme right, notably the Molodet party, which advocates expelling the Palestinians, did less well.

Mr Netanyahu's programme is well known. He is against the Oslo accords but will not reverse them. He will not evacuate Hebron, the Palestinian city in which Israeli settlers live. He will close Orient House, the Palestinians' political headquarters in East Jerusalem.

He says he will insist that the Palestinians "live up to their obligations" under Oslo. He has called for a reconvening of the Madrid conference of 1991, attended by Israel, the Palestinians, Syria and Jordan. He says he will not talk to the Palestinians about the future of Jerusalem.

It is doubtful if Mr Netanyahu will go much farther at this stage. He may even try to show that he does not want confrontation with the Palestinians by allowing them to resume working in Israel. Palestinian political leaders are aghast at what has happened, but this is partly a result of their earlier over-optimism.

Even if Mr Peres had won, he would not have had the majority in the Knesset he needed to move to the next, and most contentious, stage of the Oslo process. He would have been accused of relying on Arab votes. One of his supporters said yesterday: "He would have needed a brigade of bodyguards to defend him."

Mr Netanyahu has two scores to settle after the election. The first is with the Israeli Arabs who voted largely for Mr Peres.

They might have put him into the lead, but for the Israeli bombardment of Lebanon. According to one report, they cast about 80,000 blank ballot papers in the election for the prime minister, which would have been enough to save Mr Peres. If this turns out to be true then he will have paid high price for Operation Grapes of Wrath last month.

The second score for Mr Netanyahu to settle is with President Bill Clinton, who made little effort to conceal his preference for Mr Peres. It is possible that Mr Netanyahu will covertly try to persuade American Jews to withdraw support for Mr Clinton in his re-election bid in November. On the other hand, Mr Netanyahu will probably not want to start a feud with the US in which he will lose more than he can gain.

Mr Netanyahu has pledged not to give up the Golan Heights. This rules out any serious negotiations with Syria over a full peace treaty, though he says that he wants to normalise relations.

One of the problems which Mr Netanyahu will face on taking power was underlined yesterday when two Israeli soldiers were killed and five wounded by a roadside bomb in southern Lebanon. They were the first Israeli soldiers to be killed by Hizbollah, the Lebanese guerrilla movement, since the Israeli bombardment in April.