ISRAEL has enough troubles without having to cope with a dysfunctional political system. Yet that is exactly what Israelis are now struggling to do in the aftermath of Tuesday's general election. This was a democratic exercise in which the winner, Kadima Party leader Tzipi Livni, is almost certain to end up the loser, while the loser, Benjamin "Bibi" Netanyahu, will likely form the next government with a melange of partners he would rather not have.

This knot of contradictions is the result of some arcane rules: A political party needs only to surpass 2 percent of the votes cast to gain seats in the Knesset, so special-interest and extremist parties gain undue influence - sometimes enough to make or break a government. Using political blackmail, they can extract from the larger parties excessive budgetary favors or a veto over crucial national-security decisions.

Meanwhile, in the country's parliamentary system, the leader of the party that wins the most Knesset seats doesn't necessarily get to form a government. Instead, current President Shimon Peres will try to ascertain who has the best chance to cobble together a viable coalition. This is why Netanyahu, whose Likud Party won 27 seats, is more likely to lead the next government than Livni, whose Kadima Party won 28 seats.

However peculiar, these rules have consequences for the entire world. For everyone who longs for a negotiated two-state peace agreement between Israel and the Palestinians, the outlook appears more desolating than ever. If Netanyahu comes to power in a coalition with the xenophobic Avigdor Lieberman's party - particularly if that coalition includes no centrist parties - the result will be all too familiar: the growing power of extremists on one side of the Israeli-Palestinian conflict will only enhance the clout of extremists on the other side.

The Palestinian Islamic movement Hamas, whose longstanding political orientation is centered on rejection of the Oslo peace process, will then encounter an Israeli government that also scorns Oslo, although for different reasons. And yet, in both cases, the forces of rejectionism are not representative of the popular will. Poll after poll indicates that majorities of the Israeli public and of the Palestinians desire a two-state agreement that ends their conflict.

It will be up to the Israeli political class to repair its crazy-quilt political system. But no matter what government emerges from the confusing election results this week, the bottom line for the United States remains the same. President Obama can best meet the true needs of Israelis and Palestinians if he perseveres with the peacemaking diplomacy he has pledged to pursue.