In the spring of 1996, with Israelis still mourning the late Yitzhak Rabin and Shimon Peres locked in a tough race for prime minister with Benjamin Netanyahu, I quipped to my friend and colleague Dennis Ross in one of the worst political predictions of the modern era: There's no way Bibi can win this thing. He can't be prime minister of the state of Israel.

Seventeen years later, Netanyahu has now served for more years as Israeli prime minister than anyone other than David Ben Gurion, and though much weakened by this week's elections, is about to begin coalition negotiations toward an unprecedented third term.

But looking at the Israeli press this morning, you'd think that he's already toast. "'King Bibi,'" writes columnist Bradley Burston, "has managed to plummet to victory in a technical triumph that has every appearance of a debacle." Bibi's campaign failed, the inestimable Aluf Benn writes in Haaretz, because he had nothing much to say.

They're both right, of course. The election results in Israel were a clear defeat for the right, a non-victory for the left, a clear affirmation that there is a center in Israel, and an indication that many Israelis are indeed looking past Netanyahu for something new.

But it would be a mistake in 2013 -- just as it was in 1996 -- to write off Bibi or to conclude that Israeli politics are somehow on the verge of transformation. Remember: This is the topsy-turvy, volatile world of Israeli politics, where since independence there have been 32 governments, each lasting roughly 1.8 years. And this is a place where principles compete with the rough trade of street politics, coalition horse-trading, and downright meanness. And that is squarely in Netanyahu's wheelhouse. He knows how to survive in the shark-infested waters of Israeli politics. Indeed, in the curious interaction of domestic politics, national security, and, most importantly, the absence of charismatic leadership, there's still life left in King Bibi. And here's why.

1. The Arabs and Iran are still Bibi's best talking points

This wasn't an election about the peace process or Iran, which is why Bibi flopped, the rightist annexationist Naftali Bennett failed to meet the sky-high expectations placed on him, and why Yair Lapid, who focused on social and economic issues, fared so well.

But the security issue -- the matzav ("the situation" in Hebrew) -- is omnipresent. It's in that world where Netanyahu flourishes. And you can always count on the Arabs to offer up a lifeline.

Sure, Israeli behavior toward Palestinians on the West Bank is bad -- but compared to what? Israel's neighbors always seem to find a way to rescue the right these days. Take a look around. In Syria, Bashar al-Assad murders his own people; in Gaza, Hamas talks of pushing the Jews into the sea; in Egypt, President Mohamed Morsy and the Muslim Brotherhood espouse the worst kind of anti-Semitic tropes; and in Iran, the mullahs can't seem to open their mouths these days without muttering something about the evil Zionists.

Nowhere is there an Arab or Muslim leader who is attractive or powerful enough to challenge the Israelis, gain a constituency among the Israeli public, or give the Obama administration enough leverage to present Israelis with a real choice on peace. And in this world, Netanyahu understandably thrives.

2. There's no peace process to fight over

As long as there's no real peace process that creates a real choice for most Israelis, Netanyahu will continue to have a key role. Sure, Lapid, a potential partner for Netanyahu's coalition, espouses two states. But like his famous father, Shinui party stalwart Tommy Lapid, he's tough on peace issues such as dividing Jerusalem or the right of return for Palestinian refugees.

And in case you hadn't noticed, there is no peace process at the moment, a fact that neither Lapid nor the many other centrists emphasized in their campaigns. While Israelis are focused on domestic issues, the peace process has gone missing either because the security situation is too good (no suicide terror, Iron Dome.) or because the regional situation is too bad (a divided Palestinian leadership, an anti-Semitic Morsy, etc.)

Most likely, the kind of peace process that will emerge over the next year is one that Netanyahu can support -- a bottom-up approach with little focus on the identity issues such as Jerusalem and refugees, and maybe quiet discussions between Israelis and Palestinians on territory and security around which the prime minister can maneuver. But don't get your hopes up.

3. John Kerry needs a friend

We are going to have a new secretary of state who will have responsibility -- assuming he can convince the president to let him handle the issue -- for dealing with the Israeli-Palestinian problem. And the last thing Kerry wants is a worsening of ties between Netanyahu and Barack Obama that makes it impossible for him to do his job on such a key issue.

If Kerry wants to have a chance of succeeding -- even to manage the problem -- he'll need a relationship with Netanyahu based on some measure of confidence and trust. This is even more important given the absence of such trust between Obama and the prime minister.

George H.W. Bush and Yitzhak Shamir didn't get along. James Baker, Bush's hard-nosed secretary of state, managed to hammer out a working relationship with then Prime Minister Shamir -- tense at times but functional. Without it, there would have been no Madrid peace talks -- and without that, the Oslo talks would have been harder to produce. If Kerry is smart, he'll keep the door open to Netanyahu and try to hammer out at least a modus vivendi. Bibi, meanwhile, is going to try to build on his already positive relationship with Kerry.

4. American enablers

I'm also betting that the Obama team, bogged down as it is with so many other issues, won't get terribly creative on the peace process and will play to Netanyahu's strengths -- an interim, incremental, and bottom-up process that avoids the tough issues and steers clear of high-profile initiatives. Rather than try to undermine Netanyahu, a second-term president (even one with visions of being the father of Palestinian statehood) will likely play it safe and try to work with the new government. And who could blame him? Even if Obama decides to roll the dice, he needs an Arab or Palestinian partner to help him. And those are in very short supply.

5. Iran must be managed

There's another powerful reason Bibi will remain relevant: He's Mr. Iran. Even more than the Israeli-Palestinian peace process, or lack thereof, Iran will require cooperation between Washington and Jerusalem if an agreement on the nuclear issue is to be reached or successful military action undertaken.

Iran isn't Palestine, some localized shepherd's war even with regional resonance. The Iranian nuclear issue could have grave economic, military, financial, and political consequences for the entire Middle East and international community. The stakes are simply too high to accommodate huge policy differences or public rifts, let alone a breakdown in cooperation that compels the Israelis to take unilateral military action.

Many think this will be the year of decision with regard to the Iranian nuclear issue. Maybe yes; maybe no. Regardless, Obama and Netanyahu need to reach some kind of understanding -- first, on avoiding unilateral Israeli military action until the diplomatic effort has run its course; second, on what kind of negotiated solution the Israelis will accept; and third, if all of this fails, on what level of cooperation the two countries will engage in if military action is required. The new coalition -- if it's broad enough -- could either provide a foundation for military action against Iran or constrain it. But either way, Netanyahu will find himself in the middle of the mix with a critical role to play.

Netanyahu survives because Israel is confronting its own leadership crisis and is in the middle of an ongoing changing of the generational guard, from its founders to a generation of younger, less authoritative leaders. Ariel Sharon lies in a coma and while Shimon Peres is amazingly vibrant at 89, these two are the only historic figures that remain. A series of younger and less legitimate politicians -- Ehud Olmert, Ehud Barak, and Tzipi Livni have tried to fill that vacuum and failed.

Whatever your views of Netanyahu -- unprincipled, visionless, all tactics at the expense of strategy -- he has not only survived but prospered in the dysfunctional, byzantine, and leaderless world of Israeli politics. Perhaps this election will be the beginning of the end of his run -- a triumph for a new Israeli politics based on moderation, democratic principles, and even a new approach to the Palestinians. We can always hope. But more likely for the time being, Bibi, while he's clearly down, is by no means out.