The domestic Israeli political scene and balance of powers have a very strong effect on the peace process and the domestic Palestinian scene. The Israeli balance of power is in turn deeply influenced by Israeli public opinion. The latter sets the limits for how far negotiators can go as well as for how far Israeli bulldozers may reach.

The Israeli public and its political elite have always fluctuated in terms of their vision and positions vis-a-vis the Palestinians and the occupied Palestinian territories. During the days of the late Yitzhak Rabin there seemed to be a consensus among the political and security elite that a peace process based on territorial compromise could produce an agreement. But the assassination of Rabin ushered in an era full of hesitation and indecisiveness in Israel as far as the end of the peace process was concerned.

The election of Ariel Sharon marked a third phase in which Israel developed a strategy that disregarded the peace process altogether. Instead, the Israeli government pursued a unilateral approach that, through very practical measures, sought a combination of functional and territorial divisions of the occupied territories. Thus, Israel unilaterally evacuated Gaza and erected a wall dividing the West Bank into populated and non-populated areas. That wall created a de facto functional division where in the parts of the West Bank inside the wall, i.e., the populated areas, Israel maintained security control and control over any resources while the Palestinian Authority was left with responsibility for services such as health and education.

The period after Sharon has witnessed a continuation of that strategy even if the negotiations process has been allowed to play a cosmetic role. On the ground, Israel is still determining the future of the occupied territories through unilateral measures including settlement expansion, the wall, restrictions on movement and the separation of different areas of Palestinian territory from each other, most dramatically severing Gaza and East Jerusalem from everywhere else. However, the outgoing Israeli government did pursue a negotiations process that, according to almost everybody involved, has little to no chance of achieving any agreement within the deadline set by US President George W. Bush in Annapolis last year.

The gradual weakening of the current Israeli government led by Ehud Olmert that has led to the early elections came about as a result of both political/peace process and domestic/corruption factors. On the one hand, this reflects a return to a period of Israeli hesitation and weakness, and on the other it serves to further weaken the negotiations process, such as it is, rendering it completely meaningless.

The Israeli elections may have several negative consequences. First, they will paralyze the political and negotiations process (which wasn't expected to bear fruit anyhow). Second, and most importantly, they will only bring a continuation of the unilateral Israeli practices that have been pursued over the last six years. These, detailed above, have in turn left several deep marks on the Palestinian side, most notably by contributing to the process of radicalization in Palestinian society. This process culminated in the election of Hamas and eventually the Islamist movement's military takeover of Gaza, which further consolidated the fragmentation of the Palestinian territory. This, in turn, will only undermine the two-state solution.

Third, Israeli elections will provide a new opportunity for the right wing in Israel to make greater headway in its anti-peace settlement expansion project.

What has further aggravated the situation has been the inconsequential role of the international community, which, under US leadership, has veered between ineffectiveness and partiality. The lack of a balanced and determined international position will only magnify the effect on the peace process of the coming Israeli elections