Israel’s elections on Tuesday weakened Prime Minister Benjamin Netanyahu and raised the prospect of a more centrist government that could ease strained relations with Washington and signal more flexibility in peace efforts with the Palestinians.

But the shift left Netanyahu facing a potentially difficult balancing act, trying to fashion a coalition that will also accommodate the rising hawkish wing of his Likud party and other rightist and religious parties that will remain influential in parliament.

With 99 percent of the votes counted, results showed the combined ticket of Likud and the ultranationalist Yisrael Beiteinu faction losing a quarter of its seats in parliament, along with a surprising surge for a new centrist party, Yesh Atid, which looks set to become a key element of a future coalition.

The result meant that Netanyahu, whose faction remained the largest in parliament, would almost certainly have to join forces with Yesh Atid, now second in size. The centrist party’s demands include resuming negotiations with the Palestinians, and an alliance could result in a government less tilted to the right than Netanyahu’s outgoing administration.

An Israeli government with a large centrist component could improve Netanyahu’s tense ties with the Obama administration and ease Israel’s international isolation, which has been deepened by the impasse in peace talks and by Netanyahu’s recent announcements of stepped-up settlement building in the West Bank.

In a speech to supporters, Netanyahu said he had begun contacts “to form the broadest government possible,” which would address a range of issues, including Iran’s nuclear program, peace efforts, and domestic reforms demanded by Yesh Atid and other centrist parties.

Netanyahu, who had made an urgent get-out-the-vote appeal to his supporters on Facebook two hours before polls closed, did not acknowledge that his party had a poorer showing than expected. He said the result provided “an opportunity to make changes” that voters wanted.

Explaining Netanyahu’s poorer showing, analysts said that although most Israelis considered him the candidate most qualified to serve as prime minister, he was not personally popular, and his presumed victory made voters feel free to shift their allegiance to more-appealing candidates and their specific agendas.

Along with the centrist surge, a hard-right pro-settlement party, Jewish Home, substantially increased its strength, making it another potential partner in Netanyahu’s coalition, though with less influence than polls had previously indicated.

Netanyahu’s combined ticket won 31 parliamentary seats, a sharp decline from the 42 seats held by the two parties in the outgoing 120-member legislature.

Although the joint faction remains the largest in parliament, its shrunken size means that Netanyahu will be more dependent on smaller coalition partners to cobble together a governing majority. Coalition talks are likely to take weeks, with hard bargaining expected before a new government can be sworn in.

The results showed parliament evenly split between a group of rightist and religious parties on one side, and those of the center-left with Israeli Arab parties on the other. Still, Netanyahu was positioned to form the next coalition because of his leadership of the biggest faction.

Strong start by new party

The surprise result was the surge by Yesh Atid, or There Is a Future, which won 19 seats. Its leader, Yair Lapid, a former television news anchor and a political novice, based his campaign on a demand to end preferential treatment for tens of thousands of ultra-Orthodox Jews who are exempted from compulsory military service to pursue religious studies with government stipends.

Lapid’s campaign for equal service and easing the burden on a struggling middle class resonated with many secular Israelis, who pay high taxes and serve in the military. He says that the
ultra-Orthodox should join the workforce and do a stint of national service, either in the military or in a civilian capacity, such as working in hospitals or helping the elderly.

In a speech to supporters, Lapid alluded to both the impasse in peace efforts and his domestic demands, saying that Israel must address the challenges of “diplomatic stalemate and the wrong division of the burden.”

‘Heavy price’ for Netanyahu

Netanyahu, who pledged in his speech to address the issue of “sharing the burden,” will be hard-pressed to square Lapid’s demands with those of the ultra-
Orthodox parties that have been his traditional coalition partners. Shas, a longtime ally of Netanayahu, won 11 seats.

“Lapid will determine how Netanyahu’s government will look,” said Amit Segal, a political reporter and analyst for Israel’s Channel 2 television, adding that Netanyahu “will now have to pay a heavy price.”

Netanyahu will also have to reconcile the demand for renewed peace talks with those of the religious nationalist Jewish Home, whose 11 seats make it another potentially key partner in a governing coalition.

“We’ve returned to the center of the political map,” said party leader Naftali Bennett, who had extended Jewish Home’s appeal to secular Israelis with a call for unity among all sectors of society. Bennett opposes a Palestinian state and has called for annexing most of the West Bank.

The opposition Labor Party, which polls had predicted would be the second-largest faction, slid to third place, with 15 seats. Its leader, Shelly Yachimovich, pledged to enlist other parties to prevent Netanyahu from forming a coalition, but the voting results suggested that chances for such a maneuver were slim.

Former foreign minister Tzipi Livni, whose party, the Movement, campaigned for resuming negotiations with the Palestinians, finished with six seats, a number equal to that of a resurgent leftist party, Meretz, which doubled its current size in parliament.

It was unclear whether Kadima, a centrist party that was the largest in the outgoing legislature with 28 seats, would have enough votes to be represented in the next parliament. The party was decimated by the defections of many of its key members to other factions.