In Israel, small is crucial. Election over, two main rivals now will compete to lure smaller parties into governing coalition

Now for the hard part. Israeli voters have cast their ballots, but that's only the first and easiest step in deciding who will govern the country for the next four years.

The next phase of Israel's labyrinthine electoral process starts today, as leaders of the country's two main parties, Labor and Likud, seek to lure a bewildering array of smaller parties into a majority coalition. The party that succeeds will form Israel's next government. If history is any guide, the process could take weeks.

The Palestinian uprising, which has lent urgency to this year's campaign, intruded on election day when Palestinians in east Jerusalem tossed a firebomb at a car carrying Likud voters to the polls, injuring three. Polling results were not available at press time. Election officials were reporting a strong turnout under fair skies, conditions that pollsters say could favor Likud.

Under Israel's system of proportional representation, no party has ever won an absolute majority of 61 seats in the 120-member Knesset (parliament).

If the pollsters are right, Likud and Labor could end up with between 40 and 45 seats each, putting both about two-thirds of the way to the magic number.

To stitch together the majorities needed to form a governing coalition or to block another's coalition attempt, the two parties will first need turn to their natural allies, or ``satellite'' parties. For Likud that means the right-wing Tehiya and Tzomet Parties, both of which advocate annexation and settlement of the occupied West Bank and Gaza Strip. For Labor, it means turning to the liberal Citizens' Rights Movement, the Center Party and Mapam, which support negotiations leading to territorial compromise and separation of religion and state. Both groups of satellite parties could command between 10 and 12 seats.

Getting to 61 will then require Labor and Likud to turn to two key constituencies: Israel's 350,000 Arab voters and the six main Jewish religious parties.

In 1984, Israeli Arabs split their votes, with half going to the major parties, providing a crucial two or three seats to Labor, and half going to two the communist Hadash and the Progressive List for Peace (PLP).

``This year we see a different Arab voter,'' says Jacob Lamdan, an Israeli journalist. One reason: The uprising has weakened old loyalties to Labor. Another is the hard sell of the Palestine Liberation Organization, which has urged Israeli Arabs to vote to aid the ``end of the occupation and realization of national independence.''

The parties likely to benefit - Hadash, the PLP, and the new Arab Democratic Party - could garner up to eight seats. The problem for Labor is that, while these would be useful allies in a blocking coalition, none are acceptable in a governing coalition, since they advocate the formation of an independent Palestinian state in the West Bank and Gaza.

More crucial are the six religious parties, which, because they occupy the political center between Labor and Likud, hold the balance of power in Israeli politics.

Since 1977, the religious parties have backed Likud. But both Labor and Likud are clearly prepared to bid high for their expected 10 to 15 seats, considered indispensable to forming a governing coalition.

In the case of a tie between Labor and Likud, a new dovish religious party, Meimad, could be crucial to Labor's chances, contributing one or two seats to a Labor-led coalition.

``If voters decide to give a majority to the parties of the right, Meimad is just another new party. If votes are split to the right and left of Meimad, it will be the party for the future of Israel,'' says Avraham Diskin, a political science professor at Hebrew University.

The agonies of coalition-building could become apparent if and when Labor leader Shimon Peres attempts to coax the Citizens' Rights Movement and the religious parties, with their opposing agendas, into the same tent.

Beyond the established parties is a wide array of single-issue and ethnic parties, few or none of which are expected to garner the 24,000 votes needed to win a Knesset seat. One likely casualty: the Movement for a Just Society, which has the most unlikely constituency in Israeli politics - prison inmates.

Under Israeli law, once the new Knesset is elected the president of Israel asks the party leader most likely to secure a parliamentary majority to form a new government. If no government is formed in 21 days, the mandate is passed to the leader of the next largest potential bloc. If no coalition can be formed, new elections would be required, although that has never happened. In the meantime, the current government sits as caretaker.

As voters went to the polls yesterday, analysts predicted four possible election scenarios:

In a repeat of 1984, Labor and Likud form another coalition government after failing to garner majorities independently.

Likud pulls together a blocking coalition with the right satellite and religious parties, then forms a government without Labor.

In a reverse of the second scenario, Labor and the parties of the left block a Likud government, then gain enough support from the religious parties to form a government without Likud.

Fourth, and considered highly improbable, Labor forms an unprecedented minority government. Labor would have to be able to muster a blocking coalition against Likud. Likud and the religious parties would then have to be unwilling to join a Labor government.

Building blocks for a governing bloc Labor and Likud will vie for the support of Israel's smaller parties to put together the 61 seats for a government. Labor-leaning Could command between 10-12 seats Citizens' Rights Movement Center Party Mapam They support negotiations leading to territorial compromise and separation of religion and state.

Parties that draw Israeli-Arab votes Could garner up to 8 seats Arab Democratic Party Hadash or Democratic Front for Peace and Equality (communist) Progressive List for Peace None are acceptable in a governing coalition since they advocate formation of an independent Palestinian state in the West Bank and Gaza. Religious parties Expected to get 10-15 seats Aguda Degel Torah Shas Meimad National Religious Party Yahad Shivtei Yisrael This crucial bloc holds the balance of power. Since 1977, these parties have backed Likud. But both Labor and Likud are ready to bid high for their support this time around.

Likud-leaning Could get 10-12 seats Tehiya Party Tzomet Party Both advocate annexation and settlement of Israeli-occupied West Bank and Gaza Strip.