While Israel's two possible leaders continued negotiations with smaller parties, a consensus has grown that Likud and Kadima will join forces in a national unity government. According to senior sources in both parties, Benjamin Netanyahu will serve as prime minister, while Tzipi Livni will remain foreign minister. Haaretz also suggests that Avigdor Lieberman, whose hard-right Yisrael Beiteinu came third in Tuesday's vote, may be given the finance portfolio.
While Livni led her party to a come-from-behind victory, the surge of Lieberman and the collapse of dovish parties has made it nearly impossible for her to muster a majority. Publicly Livni insists she will lead the next government, but in private Kadima concedes that their goal now is to pressure Netanyahu to offer them the best possible terms for a partnership. "We won the battle, but lost the war," one minister said.