The world is watching the beginnings of a transformation by Benjamin Netanyahu.
Though critics predicted the right-wing Likud leader and next Israel leader might redefine the country in traditional Zionist terms, clash with Palestinians, and threaten the Mideast peace process, Mr. Netanyahu has been conciliatory since winning the May 29 vote. The question, "Could the Likud campaigner become a statesman?" posed by Hebrew University analyst Yaron Ezrahi, ultimately may be answered in the positive.
Netanyahu has toned down his statements since November, when the killing of Prime Minister Yitzhak Rabin by a right-wing Jew forced many Israelis to rethink their aggressive rhetoric. On Sunday, he hinted he would be more conciliatory than his most extreme right-wing constituency. But in the victory speech he also stressed that his first priority is to heal the bitter divisions in Israel, between Jew and Jew and Arab and Jew, before pushing ahead with more peace deals or implements the one with the Palestinians.
"Peace, first of all, begins at home," he said, signaling his desire to bridge the bitter divide between religious and secular Jews that has deepened since the assassination of Mr. Rabin, who had shepherded the peace process since 1993.
He also extended a hand of friendship to Israel's Arab population. "I see you as part and equal for everything that goes on in the state of Israel," Netanyahu told Israel's 1 million Arab citizens, allaying fears that he would emphasize exclusion of non-Jews.
And before a right-wing crowd clearly enthused with its new-found power, Netanyahu also struck a conciliatory tone on peace issues. He pledged full equality for Israel's Arab population, consolidation of the peace with Arab neighbors, and more negotiations with the Palestinians.
Netanyahu's move toward moderation from Likud hard-liner to a leader responsible for uniting the divided Israeli nation - and toward a secure peace - stems from several key factors.
*He is far less ideological and more pragmatic than Peres and most of his predecessors.
*Like Peres, he stresses the need for a state based on secular laws rather than religious ideals. And because he envisions Israel's emergence as a modern, post-industrial state, he is unlikely to risk a confrontation with the captains of global capital who are reaping the benefits of Middle East peace in Israel.
*The US-educated Netanyahu, who ran a focused political campaign with the help of American consultant Arthur Finkelstein, admires and respects America's role too much to risk a confrontation with a US administration that has a major interest in Middle East peace.
*Since the Rabin assassination, Netanyahu has drastically changed styles - from pugnacious campaigner to would-be statesman.
*In the run-up to the election, he stressed than he would honor any legal agreements entered into with the Palestinians. He also dropped his refusal-in-principle to meet Palestinian leader Yasser Arafat, although he apparently has no plans to do so.
*Because of his right-wing link with the nationalist Zionist movement of the National Religious Party (which went from six to 10 seats in parliament), and particularly with the militant Jewish settlers on the West Bank, he has significant credibility with the ultra-Orthodox parties. Thus Netanyahu has a far better chance of bridging the divide between secular and religious sections of Israeli society.
*Some of the most far-reaching moves toward peace with the Arabs were implemented under conservative Likud governments: the 1979 peace treaty with Egypt and the evacuation of Jewish settlers from the Sinai, for instance.
And some of the most damaging actions have occurred under Labor governments: the beginning of the Jewish settler movement on the West Bank and the harsh response to the Palestinian intifadah (uprising) that began in 1987.
Despite these factors, Netanyahu will have some heavy political debts to repay to right-wing supporters.
His commitment to expand Jewish settlements on the West Bank and block the Palestinian demand for a sovereign state will likely raise tensions with Palestinians and the Arab world.
He may also face severe problems on the economic front: He has pledged to push Israel toward a more free-market economy, which would require less government spending.
And trying to keep Israel's rapidly growing economy on track while cutting the government's budget and social services will likely anger the newly ascendant religious and Russian immigrant parties. They want government assistance on housing and employment.
Despite these hurdles, it is clear Netanyahu intends to pursue peace, though with a strong emphasis on security. "We plan to advance the process of dialogue with all our neighbors in order to achieve a stable peace, a real peace, peace with security," he said in the speech.
"I think it is safe to assume that Netanyahu's slogan of a secure peace appealed to a portion of the Israeli public that supports peace but expects Netanyahu to be a more effective, tougher and shrewder negotiator," says Mr. Ezrahi.
Since virtually all Labor supporters favor peace and some Likud followers want a tougher peace, he says, one could interpret Netanyahu's mandate as requiring him to continue the peace process.
But by some counts the voters have spoken strongly against the peace accord with the Palestinians as implemented by the Labor Party. Its high price is a likely factor: Two hundred Israelis have been killed since the October 1993 signing of the accord, most by Palestinian suicide bombers.
"The meaning of the vote is clear," says Likud legislator Uzi Landau. "We will offer genuine autonomy to the Palestinians but we will not use Arafat as a subcontractor for putting down terrorism. We will take charge of security. We want peace on the one hand and security on the other."
Mr. Landau says that a Likud-led government is unlikely to withdraw Israeli soldiers from the conflict-ridden West Bank town of Hebron for the same security reasons that Peres had delayed the promised withdrawal on March 28.
But the forces unleashed by the Mideast peace process and the liberalization of the Israeli economy since the mid-1980s have created a momentum that no Israeli leader could afford to ignore - let alone reverse.
In fact, both the major parties have accepted that seeking peace with the Arabs is an irreversible reality.
The point of contention among Israelis is the pace and content of the peace process - an issue that gets at the fundamental question of the nature of Israel: Will it move toward being a pluralist democracy in which its 1 million Arab citizens are treated as equals?
Or will it remain an exclusively Jewish state in which Arab citizens are regarded as second-class citizens and in which Jews alone decide the future? Netanyahu's emerging middle-of-the-road answer is this: "I see my first mission as prime minister to bind the rifts, to reduce the gaps, to lessen the tensions, and to strengthen the unity of the people," he said Sunday.