Cover story in Issue 18, December 22, 2008 of The Jerusalem Report. To subscribe to The Jerusalem Report click here. The irony is inescapable. It was Ehud Barak who set the ball rolling by forcing Ehud Olmert's resignation, and it was Tzipi Livni who precipitated February's general election, but of the three politicians who hope to be Israel's next prime minister, it is undoubtedly Benjamin (Bibi) Netanyahu who looks like coming out on top. A spate of November polls all pointed to a similar trend: Netanyahu's Likud would more or less treble its power and win over 30 of the 120 Knesset seats and is on an upswing; Foreign Minister Livni's Kadima would win under 30 and is losing ground, and Defense Minister Barak's Labor would crash to an all-time single-digit low. The best polls for the Likud had Netanyahu's party as high as 37; the worst for Kadima and Labor put them at 23 and 7 respectively. Most significantly, all the polls give the right-wing bloc, including the religious parties, that will automatically support Netanyahu for prime minister, a majority of between 64 and 69. Unless there is a significant reversal of the current trend, Netanyahu is virtually certain to form the next government. Not so long ago, such a scenario would have seemed highly improbable. In the last election in March 2006, the Likud won only 12 seats, while Kadima and Labor between them garnered 48. Netanyahu's hard-line rump of the once dominant Likud movement seemed down and out, an outmoded irrelevance on the political spectrum, after party moderates under the charismatic Ariel Sharon broke away in November 2005 and were joined by some prominent Laborites to form Kadima, with what seemed to many voters to be a winning formula for if not peace, at least for separation from the Palestinians. Not only did the Likud seem bereft of pertinent ideology, in Netanyahu it seemed to be saddled with an unpopular and unreliable leader, who had failed in his first term as prime minister (1996-1999), and who, as finance minister (2003-2005), had alienated the party's staple blue-collar, mostly Sephardi electoral base, by imposing stringent cuts in child allowances, income supplements and unemployment benefits. And even now, its critics claim, the Likud is out of sync with the rest of the world. Its economic orientation is towards free-market policies and deregulation at a time of growing government intervention and it totally rejects the Annapolis process with the Palestinians nurtured by the Americans and endorsed by the international community. There are other vulnerabilities, too: The Likud is seen by many secular Israelis as being too close to the ultra-Orthodox Sephardi Shas party; its own potential Sephardi supporters see a predominantly Ashkenazi party leadership; and wavering centrists are deterred by the prominence of radical right-winger Moshe Feiglin, whose extremist Jewish Leadership movement has carved out a niche in the Likud and who seems set to win a top spot on the party's Knesset slate. So how did the embattled Likud turn things around so comprehensively in such a short space of time? According to Reuven (Ruby) Rivlin, one of the party's most seasoned politicians, three external events transformed public opinion: the disengagement from Gaza, the Second Lebanon War and the international economic crisis. The unilateral disengagement, Kadima's raison d'Ãªtre, has generally been perceived as a resounding failure since it was followed by persistent rocket attacks on Israeli civilian communities; the Kadima-led government was discredited by its poor handling of the Lebanon war; and, despite his free-market orientation, Netanyahu, with his strong economic background, was seen as a potential savior as the economic crisis deepened. But, says Rivlin, a former Knesset Speaker, none of this would have mattered politically had the Likud not performed as well as it did in opposition. "Even though it had only 12 seats, the Likud was the dominant Knesset faction and gave the impression of being the only serious alternative to the government," he tells The Report. Indeed, after its electoral debacle in 2006, the Likud could easily have fallen apart. Instead, it closed ranks and quietly rebuilt. "Netanyahu and the party institutions kept things together, balanced the books, brought in new members and kept the membership steady at around 100,000," says Yisrael Katz, chairman of the party secretariat. He adds that the party image has received a considerable boost with the recent influx of high-profile new members, like former chief of staff Moshe (Bogie) Ya'alon, former police chief Asaf Hefetz and former national security adviser Uzi Dayan, and the return to the fold of party stalwarts like Benny Begin and Dan Meridor. Responding to grumbles that these newcomers will take the places of veteran, loyal Likudniks, Katz argues that they should not be seen as coming in at the expense of anyone else but rather to replace the high profile people who broke away with Kadima. "The message is that the split with Kadima is no longer a factor," he declares. The Likud's revival has also been helped by the relative weakness of Netanyahu's rivals for prime minister. Barak is widely disliked for his perceived arrogance and his having enriched himself by exploiting his connections as a former prime minister and has antagonized even die-hard Laborites; Livni's failure to form a government in the wake of Ehud Olmert's resignation as prime minister in September raised questions about her readiness for the top job. She has also been hurt by Olmert's refusal to make way for her to head the transitional government until the February election, which would have given her the gravitas of incumbency. Still, the extent of the Likud's ascent has been unprecedented in Israeli politics. The projected jump from 12 to well over 30 seats means that it has picked up around 800,000 new voters, a hefty 20 percent of the electorate. Most of them, says Katz, are Likudniks returning home. "Of course, the bulk are former Kadima voters, but there are also about seven seats from working-class Likudniks who didn't vote at all in 2006 because they considered themselves victims of Netanyahu's economic policies," he maintains. Moreover, says Katz, there are signs that many more disaffected working-class people will return to the fold, and he also expects to pick up votes from pensioners and from young people who see the Likud as the "in" party of the day. Naturally the mood in the party is euphoric. "All the rallies are jam-packed and you can feel it in the air that we are on the way back to power," says activist Uri Faraj, of Petah Tikva, who is running for Dan District's 27th slot on the party list. The anticipated Likud victory has also led to a flood of donations to the party and its candidates for top Knesset spots. Nevertheless, despite the upbeat ambiance, there are internal tensions. Netanyahu's recent coup of recruiting star quality reinforcements has created antagonism between some of the newcomers and veteran party members. For him, personally, it was a huge collective vindication, a public testament that people like Begin and Meridor, Hefetz and Dayan, who had bitterly slammed his leadership in the past, were more than ready to serve under the new model Bibi 2008. But, for the current Knesset members, the "magnificent 12," who were there for him during the wilderness years, the newcomers pose a threat, not so much to their seats in the Knesset as to their places round the next cabinet table. Moreover, the party rank and file are suspicious of people like Hefetz, a former Laborite, and Dayan who tried to start his own party, who have jumped on the Likud bandwagon. They also distrust the dovish, "Mr. Clean" Meridor, who broke from Likud in 1999 to help found the now defunct Center Party and is seen as more suited in his views to Kadima than to Likud. So there could be surprises when the Likud's 100,000 plus membership chooses the party's Knesset slate in a primary scheduled for December 8. "Our members are smart enough to realize that some of the people who have joined are major electoral assets and could be the difference between winning and losing the election. But we need to know that tomorrow or the day after, these same people don't take the seat they win to set up a new party or an oppositional faction inside the Likud," says Faraj. In the run-up to the February election, the rampant Likud will have to weather sharp criticism from both the right and the left. Former Likud minister Uzi Landau, who led the Likud rebels against Sharon's disengagement plan, decided, on his return to politics, not to jump on the Netanyahu bandwagon, opting rather for the more hawkish Yisrael Beiteinu. He argues that Netanyahu's new expanded Likud is a vague supermarket of ideas, yoking together people with irreconcilable views on key issues. For example, Benny Begin is against territorial compromise in principle, while Uzi Dayan is vague; Moshe Ya'alon is against the Supreme Court in its present form, whereas Dan Meridor returned to politics to defend it. "Begin and Ya'alon strengthen the realistic wing of the Likud, but Meridor is a genuine left-winger. So I ask you: What is the Likud?" he declares. The strongest criticism of the Likud, though, comes from the left. Kadima and Labor blame Netanyahu's deregulation for the public's huge pension and savings losses in the current crisis. "Calling on Bibi to save the situation is like calling the pyromaniac to put out the fire," says Kadima's Haim Ramon. Indeed, the Kadima campaign is homing in on Netanyahu and what it sees as the bankruptcy of his policies. The aim will be to highlight what they see as Netanyahu's periodic lapses of memory and embellishments of the truth, and to assert that the Likud has no answers on the peace process or the economy, and that it will sell out to the ultra-Orthodox Shas. "Bibi is the same old Bibi and the Likud is the same old dead-end Likud Sharon left because it was leading nowhere," says Kadima strategist Eyal Arad. The Likud answer will be to highlight Netanyahu's economic credentials, to assert that his plan for economic peace with the Palestinians makes more sense than going for an unrealistic political peace with a weak Palestinian partner in the West Bank and Hamas in control in Gaza, and to deny that Likud foot-dragging on the peace process will inevitably lead to a clash with the new American administration. "If you take the three candidates, Livni, Barak and Netanyahu, Bibi knows how to manage the economy far better than they do. No one can seriously say Livni or Barak understands the economy or that Bibi doesn't. In the current crisis, you need someone who can hit the ground running, someone who knows the material," former minister Yuli Edelstein tells The Report. Edelstein calls the prospect of American pressure on a Likud government over the peace process "a myth." "The Americans always demand that there be a process, but they never say what needs to be in it," he argues. "So when Netanyahu approaches them with his vision of economic peace [boosting the Palestinian economy as a stepping stone to political peace], there is no reason on earth why that shouldn't become the agenda for the Obama government, the Europeans and others. They all understand there is no quick fix," he declares. As for the Shas connection, Likud leaders openly acknowledge that it is very close, but deny that it will mean huge budgets or control of the Education Ministry for the ultra-Orthodox. According to Katz, he convinced Netanyahu to make a strategic decision over a year ago to revive what he calls the Likud's "historic alliance" with Shas. The thinking was that this could help the Likud launch a two-stage move to power, first by preventing Livni from forming a new coalition if the beleaguered Olmert resigned, and then being sure of having Shas in a right-wing religious bloc of at least 61 seats that would back Netanyahu for prime minister after an election. The first part of the plan worked perfectly: After Olmert resigned in September, it was Shas that ultimately torpedoed Livni's efforts to form a new government. Katz says Netanyahu worked on this for over a year, telling the Shas people that "the left can give you material things I can't, because the media won't attack them for it. But on the other hand, the left is quite capable of carrying out a secular civil agenda (for example, drafting yeshiva students and allowing civil marriage) that would leave you with nothing. I can't give you some of the material things the left can, but I could never betray you with a civil agenda, because many of my voters are traditional Jews." So when Shas decided against joining the Livni coalition, it was, according to Katz, out of profound strategic conviction. "It was not a question of money, but rather of long-term political security," he says. As for the Likud, Katz says its main strategic goal is a bloc of 61 seats that will enable it to form a government after the February election. Therefore, he says, "reviving the historic alliance with Shas is well worth it, even if it costs the Likud a seat or two." Kadima hopes it will cost the Likud much more. It intends to promote a strong anti-Shas civil agenda in an attempt to discredit the Likud and capture the political space once owned by the now defunct secularist Shinui party. The hope is that the promise of civil marriage and other curbs on the power of the Orthodox establishment will appeal to all secular Israelis, but particularly to immigrants from the former Soviet Union, over 300,000 of whom are ineligible to marry in Israel because they are not considered Jewish under religious law. Edelstein, the Likud's leading Russian-speaking candidate, is convinced the Kadima campaign will have little impact. "It is built on the assumption that the immigrants are stupid. Barak said in 1999 that he would draft all the yeshiva students, but then declared in the Knesset that he didn't realize it would be so complicated. Then there was Shinui, and many immigrants voted for it because it was against Shas. But what did it achieve? Nothing. The immigrants won't be taken in a third time by cheap demagoguery," he declares. More than by the association with Shas, Netanyahu is worried about the Likud being stigmatized as extremist by a prominent presence on the party's Knesset list of Feiglin and his radical Jewish Leadership group. This he fears could lose the Likud much of the large reservoir of centrist votes it has already gained from Kadima. In late November, Netanyahu publicly signaled that he did not want the radicals on the list by warning party Knesset members not to attend a major Feiglin campaign rally. Katz, who is helping to pull party strings against Feiglin, rates the radical leader's chances of securing a top spot on the list as no more than 50-50. Most pundits, however, believe the chances of stopping Feiglin, who advocates a non-democratic Jewish theocracy in Israel and whose Jewish Leadership camp in the Likud numbers about 6,000, are slight. He has been making deals with other candidates, promising his considerable support in return for theirs, to make up the 20,000 votes he needs to secure a realistic place on the Knesset list. Indeed, Feiglin says he has not given up his aim of leading the Likud and points out that when he last challenged Netanyahu for the leadership in August 2007, he polled almost a quarter of the party vote, a result that shook the party hierarchy. As to the argument that his very presence on the list will cost the Likud votes, Feiglin claims the opposite is the case. "One third of the electorate defines itself as right of the Likud. Many of them don't even vote. And if the Likud can open a door for them by putting people on its list who represent the national camp, its share of the vote will actually grow," he tells The Report. Netanyahu's antipathy towards the Feiglin camp suggests that if he wins the election, he may prefer a broad coalition with Kadima and or Labor to a more narrowly based government with the far-right. In private conversations, he is reported to be saying that one of his big mistakes in 1996 was his decision not to form a national unity government with Labor, led then by Shimon Peres. Indeed, there are rumors that he and Barak have already sewn up a deal whereby the Labor leader will join a Netanyahu government as defense minister. Netanyahu trusts the experienced Barak to help him handle the Iranian nuclear threat, and he believes that if he keeps Kadima out of his coalition, it could split or even disintegrate. Katz acknowledges that Netanyahu and Barak "talk all the time," but denies there has been any deal. Everything he says depends on whether the right-religious bloc gets a majority of at least 61 seats in the next Knesset. Then, he says, all coalition options will be open. "Once he has the 61, he can do what he likes. He could bring in Kadima and Labor, Kadima or Labor, or even split Kadima, and bring in a third of its faction, led by the party's hawkish No. 2, Shaul Mofaz," he says. But there is still a long way to go till election day. The party lists have yet to be chosen and the campaigns have yet to get off the ground. There is still time for PR coups, major electoral gaffes and opinion-changing events. "It ain't over till it's over," says Rivlin. "We have to first win the election, before we fight over who our ministers or our coalition partners will be," the veteran campaigner warns. Still, as things stand, a lot will have to go wrong for Netanyahu and the reinvigorated Likud between now and February for them to lose on election day. â€¢ Cover story in Issue 18, December 22, 2008 of The Jerusalem Report. To subscribe to The Jerusalem Report click here.