Tough choices for Israel PM after Pyrrhic victory

Benjamin Netanyahu's Pyrrhic election victory and the shock strength of Yair Lapid's centrist Yesh Atid mean tough choices for Israel's premier, heralding a period of political instability, pundits said on Wednesday.

"A blow for Netanyahu, a running start for Lapid," was the banner headline in the top-selling Yediot Aharonot, over a beaming picture of the Yesh Atid chief, a former TV anchor, who was crowned Israel's new political king on Wednesday.

In results that defied expectations, and just nine months after it was created, Yesh Atid won 19 seats to become Israel's second-strongest party.

Netanyahu's Likud-Beitenu list saw its representation plunge from 42 seats to just 31.

In third place was the centre-left Labour with 15, in a result which saw the Knesset's 120 seats evenly split between the rightwing-religious bloc and the centre-left.

"On Tuesday we got a new king: Yair," wrote Yossi Verter in the left-leaning Haaretz, indicating that the days were over for "King Bibi" -- the moniker handed Netanyahu by Time magazine.

"The joint Likud-Yisrael Beiteinu slate that he headed suffered a searing collapse, and he personally received a resounding slap in the face from rightist voters," he added.

"He'll retain his job, but under tougher conditions, with a less comfortable coalition and a party whose discontent will only grow."

For many pundits, Netanyahu's defeat -- and to some extent Lapid's victory -- was personal and linked to simmering public anger over the rising cost of living which found expression in mass nationwide demonstrations in the summer of 2011.

Nahum Barnea, Yediot's chief political commentator, described Netanyahu as "a tragic figure" who had alienated himself from the public with his personal behaviour and political zigzagging.

"A prime minister, when he is elected, receives a large helping of respectability. Netanyahu squandered his completely. He squandered it with his personal behaviour. He squandered it with his political decisions."

The seeds of public discontent were sown during the 2011 protests and found voice at the ballot box on Tuesday, taking votes from Netanyahu and handing them to Lapid, the centre-left Labour party and the leftwing Meretz, he wrote.

"The feeling of disgust with the political game did not die... The protest is the real winner of the elections."

Netanyahu's Likud also failed by losing its grip on the political centre, allowing the party to slide to the right through its disastrous electoral "marriage" with Yisrael Beitenu, Haaretz said.

"(It) turned out to be a match made in hell. It delegitimised Likud," the newspaper adding, saying religious voters had defected to the Jewish Home party and moderate centrists to Yesh Atid.

Coalition negotiations are expected to take at least two weeks, with Netanyahu facing a raft of tough choices, analysts said.

Yisrael Beitenu head Avigdor Lieberman, a rightwing secularist, would prefer to join hands with Lapid or Naftali Bennett's Jewish Home to tackle the issue of drafting the ultra-Orthodox into the military.

But Netanyahu's people will press for an alliance with his rightwing-religious allies: Jewish Home and the ultra-Orthodox Shas and United Torah Judaism.

"Netanyahu has to decide: he won't be able to do both," Barnea wrote.

By allying himself with the rightwing and religious bloc, it would be "practically impossible" to move forward with foreign policy or push through meaningful socio-economic change, meaning Netanyahu "needs Yair Lapid," wrote Shalom Yerushalmi in Maariv.

Lapid, he wrote, had two choices.

"He can either join the government and save it, for all intents and purposes, and possibly the country as well.

"Or he can head an opposition with 59 seats, and fight Netanyahu as strongly as possible and wait for him to fall because it is very difficult, almost impossible, to work with a government that only has 61 MPs."

Haaretz analyst Chemi Shalev said Netanyahu's options were limited.

"His coalition blanket may be too short: If he starts with Lapid, he will alienate Shas... If he starts with Shas, he may drive Lapid into the outstretched arms of Labour and Tzipi Livni" of the centrist HaTnuah, he wrote.

"And be wary of talks of an easy Likud-Lapid-Bennett coalition: It will fall apart at the first sign of a US diplomatic initiative."