Any timetable for advancing an Arab-Israeli peace settlement this year, a major objective of the Carter Administration, has most probably been thwarted by the Israeli election results.
The man most likely to lead the new government, rightist Likud Party leader Menachem Begin said today on the crucial issue of the territories occupied in the 1967 war: "What occupied territories? If you mean Judea, Samaria and the Gaza Strip, they are liberated territories and they belong to the historic state of Israel."
Although the dust has not yet settled from Likud's election victory yesterday and the stunning defeat of the Labor alignment - which has ruled Israel for all 29 years of its existence - the settlement setback and two other points began to emerge from the doubt and speculation:
With only 41 seats out of a total of 120 in the next Parliament, Likud's chances of being able to put together a stable and lasting coalition government are exceedingly doubtful. This is of itself a major reason that progress toward a Middle East settlement may have to be postponed.
Whatever the international considerations, yesterday's vote was far more a defeat for the ruling Labor Party than a victory for Likud.
With 39 seats in the last Parliament, Likud picked up only two seats whole the Labor alignment dropped to 33 seats from the 54 it held in the last Parliament, a dramatic loss of 21 seats.
As in most elections, domestic issues were more important than foreign affairs and the Israeli people clearly wanted a change.
There has been talk here today, and Labor's leader, Shimon Peres, hinted last night, that the Carter administration's loose talk about Palestinian homelands, borders with only minor adjustments plus other statements and actions frightened Israelis and took votes away from the Labor Party.
Perhaps in some cases it did, but there was plenty in the way of scandals, corruption, economic stagnation and inflation - which Peres also mentioned - to account for Labor's loss without balming it on external factors.
The prognosis that progress toward peace has not been enchanced by Likud's victory yesterday is based on more than the fact that Likud is more Hewkish than either Labor or the third-place party, the Democratic Movement for Change.
Likud is opposed to any territorial concessions on the occupied West Bank and Gaza Strip, while the Labor Party and the Democratic Movement are on record as favoring territorial concessions in all the occupied territories in exchange for peace.
Begin argued today that neither the Americans nor the Arabs have ever shown any enthusiasm for the various trial balloons floated by Labor's leaders, such as the Allon Plan, which envisions keeping about a third of the West Bank. Therefore, he said, the Laor Party's relative dovishness meant very little in real terms, as neither party intended that Israel return to the 1967 borders.
It has also been argued that the responsibilities and realities of power, as opposed to years in opposition, will have a moderating effect on Likud, so that foreign policy will not fluctuated wildly. Even if Labor had won, it would have had to hold new elections before it could have ceded territory on the West Bank.
Ranged against these considerations, however, is the fear that the relative inflexibility of Likud on territorial concessions may make it difficult even to begin a process of serious negotiations.
What any Israeli government could cede in the way of territory is comparatively narrow, in any case. It has been hoped by diplomats that Israel's readiness to give back territory would encourage a process that could eventually lead to a compromise. A lack of readiness to cede any territory on the West Bank might have the opposite effect.
Menachem Begin himself, who will certainly be asked to try to form a government when the official election results are published within two weeks, is so deeply mistrusted by the Arabs that this may also have an adverse effect on negotiations. Begin was the leader of an extremist territories group, the Irgun, in the pre-independence period.
In Israel, Begin is respected personally even by his devish foes. Yesterday's terrorist has long ago become the former freedom fighter and potential statesman: Indeed, what former British colony has not at one time been led by a resistance leader?
For the Arabs, however, Begin is still regarded as an extremist, and his emergence as prime minister may have the same emotional and psychological effect as the emergence of Yasser Arafat as a negotiating partner would have on the Israelis.
On the other hand, Egypt's President Anwar Sadat once said he would rather deal with the more hawkish but stronger Golda Meir than Yitzhak Rabin, whom he considered ineffective.
But the basic arithmetic of yesterday's election indicated that Begin will have great difficulty putting together a strong coalition.
Although the final votes will not be counted until the end of the Week, because of the ballots from far-flung army posts, 60 per cent of the vote has not been counted, and the final results can now be confidently predicted give or take one or two seats.(TABLE) PARTY(COLUMN)SEATS(COLUMN)PREVIOUS Likud(COLUMN)41(COLUMN)54 Labor Alignment(COLUMN)33(COLUMN)54 Democratic(COLUMN)(COLUMN) Movement(COLUMN)14(COLUMN)0 (New Party) National(COLUMN)(COLUMN) Religious Party(COLUMN)12(COLUMN)10 Communist(COLUMN)6(COLUMN)4 Others(COLUMN)14(COLUMN)13 TOTAL(COLUMN)120(COLUMN)120(END TABLE)
Despite Labor's losses, it won enough seats under Israel's proportional representation system for Peres, Rabin, Foreign Minister Yigal Allon and former Foreign Minister Abba Eban to return to Parliament. Voters ballot for parties instead of individual candidates, and each party publishes a list of candidates in order or rank. Rabin was No. 20 on Labor's list.
Rabbi Meir Kahane, founder of the militant Jewish Defense League in the United States, was defeated in his bid for a seat.
Since Likud does not have a clear majority, Begin said last night that he would like to have the broadest coalition possible - an across-the-board government of national unity to include the Lador Party and the democratic Movement for Change as well as the right-wing parties.
This is an old dream of Begin, who served as a minister without portfolio from 1967 until 1970 in a previous attempt at a government of national unity.
Likud met today to discuss various caolition possibilities, and Begin is scheduled to meet with Shimon Peres, the leader of the Labor Party, Thursday.
Few observers here feel that such a "wall-to-wall" coalition will prove acceptable to Labor. Most probably the Labor alignment would rather stay in opposition and wait for another chance at power than join a coalition under Likud's leadership, Labor and Likud disagree on almost every issue.
The second possibility, and probably the most likely and best chance for a successful coalition, would be for Likud and its natural allies, the right-wing National Religious Party and other right-of-center groups, to join forces with Yigal Yadin's Democratic Movement for Change.
Here again, however, there will be great difficulties, because the Democratic Movement is far more liberal and dovish than either Likud or its allies.
The Democratic Movement has a list of seven minimum demands as the price for cooperation in any coalition, and Yadin described these principles today as "sacred." The Movement is against any annexation of the occupied territories and will demand new elections within two years based on a mixed system of representational and proportional constituencies.
These demands were written with carefully chosen words so as not to exclude a coalition with Likud, but in practical terms it will be very difficult for Likud and the Democratic Movement to come to terms. Even if they did, the differences between them would be sure to surface later.
The possibility exists for Likud to form a narrow coalition of rightwing and religious parties and forego a coalition with either the Democratic Movement or Labor. BUt the arithmetic is very narrow.
It might be possible for Likud and the National Religious Party together, with 53 seats between them, to team up with retired Gen. Ariel Sharon, who won two seats yesterday, and two smaller religious parties with five seats between them. This would add up to 60 seats and, when the soldiers' votes are finally counted, it is likely that the right-of-center parties will pick up another one or two seats, which would produce a majority.
But the chances of success in trying to rule Israel on such a narrow majority, let alone in entering negotiations to commit the nation on the vital issues of war and peace, are very shaky.