London: Progress on the peace process with the Palestinians is very unlikely, as is an improvement in Israeli-US relations under the current leadership, according to Firas Abi Ali, Head of Middle East Analysis, IHS Country Risk.
Preliminary election results issued on Wednesday indicate that Israeli Prime Minister Binyamin Netanyahu has won re-election, with his Likud Party polling 30 out of 120 Knesset seats in yesterday’s general election. Crucially, Arab-Israeli parties, which formed the United Arab List, are expected to win 14 to 15 seats and form the third largest bloc in the Knesset.
Progress on the peace process with the Palestinians is very unlikely, as is an improvement in Israeli-US relations under the current leadership. Netanyahu is likely to form a right-leaning cabinet, which would significantly raise the risk of civil unrest among the Arab-Israeli and West Bank Palestinian populations, and which would increase the risk of another war with Hizbullah.
Palestinian unrest in Israel proper and the West Bank would be particularly likely if the United Arab List succeeds in maintaining its unity and plays an active role in leading unrest, resulting in protests in Jerusalem and Haifa, well as northern Israel. Neither coalition would be likely to instigate major economic changes.