How Israeli election outcome affects peace prospects

The Israeli elections held last Monday were critical both for Israel and for the Middle East. At stake for the Israelis was the future character of their society and state. And for them and outsiders the outcome could determine the prospects for peace in the region.

For both purposes the decisive issue was the same: How would the next Israeli government deal with the West Bank and Gaza? Would Israel continue its aggressive effort to settle and absorb these areas with their 1.3 million Palestinian inhabitants, as the Likud government has been doing since 1977? (Israeli settlers expanded from 3,000 in 1977 to about 30,000 in 1983.) Or would it be prepared to exchange these lands for secure peace with its Arab neighbors?

If Israel absorbs the occupied territories, then Arabs, who now constitute 15 percent of its population, would rise to 40 percent. If the Palestinians were granted full citizenship, Israel would effectively become a binational state. Or if they were denied equality, Israel would resemble South Africa. The official repression in the occupied territories and the terrorism of the Israeli settlers , for which some 25 were recently arrested, are corrosive symptoms. Either result conflicts with the original conception of Israel as a democratic Jewish state. This dilemma prompts leaders of the Labor Party and others to favor relinquishing most of the occupied territories (to Jordan, one would hope) for a secure peace.

For all interested in stable peace, including the United States, Israeli absorption of Palestinian lands and people would be disastrous. It would almost certainly mean indefinite turmoil and rule out any chance for peaceful relations between Israel and the Arabs.

The election, of course, involved other issues: the desperate state of the economy, with inflation raging at 400 percent, and the consequences of occupation of Lebanon, which grows steadily more costly in casualties and more brutal in reprisals. The many parties reflect the deep cleavages in Israeli society - secular vs. orthodox, Europeans vs. Sephardics - as well as diverse attitudes toward Greater Israel. That is why the Knesset has 13 smaller parties in addition to Labor and Likud. But Labor, which tends to be secular and European, did endorse trading most of the occupied lands for peace, while Likud, which mobilizes the ultra-Orthodox and the Sephardic poor, strongly supported Greater Israel and keeping these territories.

The results of the election are deeply troubling. They show an electorate splintered and drifting rightward. Labor won 45 seats - 2 less than it had; Likud's 41 is a loss of 7. In a Knesset of 120, the smaller, single-issue parties together won 34 seats, an increase of 9. Thus the question is whether Labor or Likud will be better able to piece together a coalition of 61 necessary for a majority. Prime Minister Yitzhak Shamir, leader of Likud, and some smaller parties are pressing for a Labor-Likud coalition of national unity, which Labor thus far rejects.

The modest Likud loss testifies to its firm hold on its voters, even without Menachem Begin. The impact of inflation, however, was mitigated by the subsidies on staple commodities, and widespread indexing - as well as the cushion provided by US assistance equivalent to about $3,000 for a family of four. Apparently Labor achieved few defections.

Labor will have trouble forming a government. It starts with a 5-seat margin. Natural allies are two parties favoring peace with the Arabs which got 7 seats - an increase of 4. And the five votes of the Communists and another small party favoring Palestine independence, not acceptable allies, can be counted on to oppose Likud, at least on Palestine. Still, Labor may have a hard time enlisting the votes from the other small parties, many of which have closer affinity with Likud.

Thus the outlook for progress toward a peaceful solution is extremely discouraging. Even if Labor forms a government, the inevitable compromises will almost surely produce a weak and unstable regime ill-suited to take hard decisions on the economy, Lebanon, or the occupied territories, although probably suspending further settlements. Conversely, a Likud regime would seek to continue settlements and takeover of the West Bank and Gaza. And in a national-unity coalition, Likud would block constructive moves toward a peaceful settlement.

Even with a Labor regime, any initiatives for negotiations would probably have to come from elsewhere - the Arabs or the US. But the uncertain prospects are likely to make King Hussein of Jordan more cautious. Some potential West Bank leaders have intimated that they might start the process if allowed some room for maneuver. But the Israeli antipathy to a Palestinian state would still make King Hussein an essential party.

The US cannot take the place of the main parties, but we might help give them the political confidence to act. We would have to convince the Arabs of our commitment to a balanced solution and of our readiness to use our leverage. An election year is not a propitious time, for obvious reasons, but something might be done after the election. Yet the prospects are very dismal.

One thing is clear. While the takeover of the West Bank and Gaza is not yet irreversible, the Likud program, if pressed for another four years or more, will make it extremely difficult to work out a settlement.