For Livni, forming an Israeli coalition just got a lot harder

Virtually on his way out the door from the prime minister's office, Ehud Olmert told Israelis what he really thinks of the future of the peace process.

In a sweeping interview with the mass circulation newspaper Yedioth Ahranot, Mr. Olmert said on the eve of the Jewish New Year last week that Israelis are dreaming if they think they can make peace with the Palestinians without paying the price: a withdrawal from most of the West Bank, East Jerusalem, and the Golan Heights.

Olmert's unusually conciliatory statements leave behind quite a complex playing field for Tzipi Livni, the current foreign minister and newly elected leader of the Kadima Party, as she tries to form a new government coalition.

Olmert and Ms. Livni were once both dyed-in-the wool Likud party rightists who left their roots to join the new "centrist" party that Ariel Sharon founded in 2005. But Livni in particular has been enigmatic about how far she is willing to go in terms of signing off on the land-for-peace formula that would lead to a two-state solution, one Israeli and one Palestinian.

"What Tzipi usually says is that things that are to be discussed in negotiations should not be discussed with the media," says a Livni adviser who asked not to be quoted. "She is not forthcoming on where she thinks compromise should be. But she has clearly been forthcoming with supporting the two-state solution."

To peace enthusiasts, this is good news for the future direction of the Kadima Party, which has supported a moderate if motionless platform since taking over in March 2006. To conservatives who don't see conditions conducive to a settlement of the conflict, Olmert's comments show a clear leftward tilt that puts him – and possibly Kadima – squarely in the camp of Israelis who are willing to make significant concessions to the Palestinians and the Syrians.

This means that while left or middle-of-the-road parties would like to join a government led by Livni, it will be harder for her to bring in parties such as Shas, which holds 10 percent of the seats in the 120-seat Knesset.

"We have to reach an agreement with the Palestinians, the meaning of which is that in practice we will withdraw from almost all the territories, if not all the territories," Olmert told the Yediot Aharanot newspaper last week. "We will leave a percentage of these territories in our hands, but will have to give the Palestinians a similar percentage, because without that there will be no peace."

Asked if this included Jerusalem, he said: "Including in Jerusalem, with special solutions that I can envision on the topic of the Temple Mount and the sacred and historical sites."

Olmert said that for 35 years he was unwilling to look at the realities of Jerusalem, the eastern half of which Israel annexed after the Six-Day War in 1967.

Palestinian Authority President Mahmoud Abbas said he was encouraged that this outlook would continue under Livni, saying that he expected it to be a deposit for the next government.

Mr. Abbas said Saturday evening he was confident that Livni would continue peace negotiations, saying in a news conference with visiting French Foreign Minister Bernard Kouchner: "We feel she may continue in the path toward peace so that the Palestinian state will be established and this will be in the interests of Israel as much as it is an aspiration for the Palestinians."

Livni, however, has been characteristically tight-lipped, and has neither embraced nor distanced herself from Olmert's views, and this has pundits watching and wondering whether her careful approach may slow up her process of forming a government. If she doesn't have a coalition government in place a month from now, new elections will be held within 90 days.

"Livni is the last great hope of moderates. But Kadima has to do something in the next year: 2009 is the year of survival or destruction of Kadima," says Reuven Hazan, an expert in domestic politics at the Hebrew University of Jerusalem.

He estimates that Livni and Olmert are in a similar place, but that Livni, "hasn't come out and made any clear statements." Because reticence has become her hallmark, some doubt whether she'll take the risks necessary to move forward.

With less than three months left to the calendar year, however, it seems few here are sure of how much political capital to spend.

An "Annapolis II" peace conference is being planned for next month in Egypt, but officials in the prime minister's office sounded noncommital about the date and much else, given that it's not clear who will be serving as Israel's prime minister by November. Palestinians may also head to elections if Abbas keeps his vow to step down in January. And Washington, naturally, will be preoccupied with the race for the White House.

None of these make for a particularly easy path for Livni as she tries to cobble together a coalition before being forced to ask for support in a nationwide ballot.

"The things [Olmert] says expose him to criticism from all quarters," wrote Olmert's interviewers, Nahum Barnea and Shimon Shiffer. "They also do not make things easy for Tzipi Livni and the negotiations that she is conducting to form a government. She can be expected to clarify whether she adopts Olmert's updated doctrine or opposes it. There is no diplomatic fog in this interview that she can hide behind."