Israel is in a political bind. The nation voted Tuesday, but Wednesday two leaders claimed victory and a third-party newcomer found himself anointed the new Israeli "kingmaker."

Centrist Tzipi Livni's Kadima won 28 seats in the Knesset, or parliament, while right-wing Benjamin Netanyahu's Likud took 27 – so slim a margin that neither can claim a governing majority.

Enter Avigdor Lieberman. The third-largest vote-getter was his far-right Yisrael Beytenu party that wants a "national, right-wing government." Common wisdom suggests an alliance with Mr. Netanyahu's party. But some analysts say that Mr. Lieberman might find common ground with Ms. Livni. Either way, Lieberman will have great sway over the makeup of Israel's next governing coalition, potentially winning control of key ministries.

Many observers – right and left – now worry that Israel is headed toward years of political gridlock and dysfunction, potentially putting any Middle East peacemaking in limbo.

"They're saying we hold the keys to Israel's next government, and I'm very glad to say we do," Lieberman said in a speech at his campaign headquarters. "We have our own path and our own principles, and we are not going to compromise on them." Among his goals, he said was the "elimination of Hamas," the Palestinian group that Israel battered in a 22-day war in Gaza that ended with an unofficial pair of cease-fires last month.

Lieberman also says that terrorism inside of Israel is more of a threat than terrorism from the Palestinian territories – essentially calling Israel's Arab minority a bigger threat to the Jewish state's existence than is the militant Hamas.

With 12 parties winning seats in Tuesday's vote, there are a whole range of permutations that political scientists can envision when they try to predict what kind of government will ultimately emerge.

While Ms. Livni edged out Mr. Netanyahu by one seat, which would traditionally give her the right to form a coalition government with her as prime minister, center, left-wing, and Arab parties won a total of only 54 seats. That makes it impossible for Livni to establish a governing majority with a clear preference for reaching a peace deal with the Palestinians.

Right-wing parties won a total of 66 seats, which gives Netanyahu an advantage going forward.

The difficulty in putting together a collection of parties that are willing to sit at the same cabinet table is already looking like the unpleasant task of making seating arrangements for a clan in the midst of a simmering family feud.

The competing efforts of Livni and Netanyahu to concoct a coalition will involve not just differences in the macro-conflict with the Arab world, but a series of micro-conflicts here that pit religious versus secular, Ashkenazim versus Sephardim, and free-marketeers versus latter-day socialists.

"Unfortunately, this system gives enormous power to smaller parties. And at the moment, everything is in the hands of the radical right," says Gadi Wolfsfeld, a professor at the Hebrew University of Jerusalem.

"It's difficult but not totally impossible for Livni to form a government, because as we know, politics make for strange bedfellows," he adds. "But whatever happens, it doesn't look like it's going to be a stable government, and we'll be headed to another election in a year or two."

President Shimon Peres, he notes, now faces a dilemma with no precedent. Shall he wait for Livni to try to form a government, which she failed to do after being elected Kadima party leader last fall? Or give Netanyahu and a cadre of rightist parties permission to form a government, which they apparently have enough votes to do already?

Lieberman, who immigrated here 30 years ago from the former Soviet Union – he was born and raised in what is now Moldova – hit the national scene in the 1990s as Netanyahu's chief of staff. Soon after, Lieberman struck out on his own, attracting Russian-speaking voters away from Natan Sharansky's more moderate party representing immigrants from the former Soviet Union. Now Lieberman draws voters of all backgrounds, including native-born Israelis. The fans among them say he "tells it like it is," while his critics say he's using Arab-baiting rhetoric bordering on fascism.

Lieberman main slogan during the election campaign was "No Loyalty, No Citizenship," through which he proposed making it a requirement that the country's Arab citizens pledge their loyalty to Israel or be refused citizenship. One of the top members of the party, already a member of Knesset in Lieberman's party, told The Monitor in an interview at the party's campaign headquarters that such a citizenship test would indeed be a priority for a government with Yisrael Beytenu in it.

"Every Israeli who wants to be a citizen will have to pledge an oath of loyalty and serve in the army or do national service," says David Rotem, a lawyer who, like Lieberman, lives in a West Bank settlement.

"We won because people were looking for a party with a strong voice, for a leadership which says things clearly," says Mr. Rotem. "Unlike other parties, we are not playing with words and switching from one side to the other."

But observers say that Livni forming a coalition with Lieberman is by no means out of the question.

Despite some of his ultranationalist views, Lieberman does not oppose a two-state solution with the Palestinians. Most controversially, however, he says that any permanent peace settlement should include a "swap" in which the Palestinian Authority would gain control of populated towns in Israel near the Green Line, Israel's pre-1967 borders.

Lieberman says this is only fair, and would, of course, help Israel maintain a Jewish majority. Critics say he's endorsing population transfer – and would involuntarily strip away the citizenship of thousands of law-abiding Israeli citizens.

Though Lieberman's natural partners would seem to be on the right, he also has his fair share of enemies there, and shares a common agenda with some centrist and left-wing Israelis who want to see less control by rabbis in the public sphere.

His party is officially secular and wants to institute civil marriage in Israel, which outrages most of the Orthodox Jewish religious parties.

But Lieberman's views on other matters are an anathema to many left-wing parties such as Labor and Meretz. Several prominent Labor party politicians said on Wednesday that they would refuse to sit in a government with Lieberman's party in it.