This gives Prime Minister Netanyahu a decided advantage, barring completely unexpected defections from "his" half of the spectrum, in negotiating a new coalition. If the announced intentions of both Netanyahu and second-place finisher Yair Lapid (head of the centrist Yesh Atid/There is a Future) to join in government do not work out, Netanyahu has a narrow right-wing and ultra-Orthodox majority to fall back upon.
But the expectation is that Netanyahu will come to an agreement with Lapid on his left and Bennett on his right for a majority of 62, perhaps strengthened with the now tiny centrist Kadima (two seats). It's anybody's guess if one or more ultra-Orthodox or center-left parties might join, but Lapid's number one issue of "equal burden sharing" by the Haredim makes the former unlikely, and Tzipi Livni's participation (for example) probably depends upon the unlikely prospect of a Netanyahu government credibly committing itself to a peace initiative.
The proliferation of parties encouraged by Israel's proportional representation system clearly cost the center-left bloc at least one seat, with the Aleh Yarok (Green Leaf) party for the legalization of marijuana missing the 2 percent threshold for entering the Knesset with 1.11 percent of the vote. If, for example, this group's leaders and voters had been incorporated into Meretz, this would have garnered the seventh seat that Meretz came close to winning. The same might have happened if the approximately 4,000 Israelis (reportedly mostly Jews) had not "wasted" their votes for the Da'am Workers Party, led by a very impressive Israeli-Arab woman, Asma Agbaria-Zahalka.
And if the leaders of the new liberal Haredi split-off, Am Shalem, which missed the threshold with 1.2 percent, had aligned with Lapid, he would have come in with 20 seats. Of course, it's also true that if the 1.75 percent who had voted for the far-right Otzma LeYisrael (Strong Israel) had joined with Bennett's party, it would have likely gained one or two additional seats.
Ahmad Tibi has bemoaned the fact that more Arabs didn't vote, declaring it a missed opportunity to defeat Netanyahu. Arab Israelis actually increased their participation from 53% of those eligible in 2009 to 56%, but this was more than ten percentage points below the national rate. If they had voted in the same proportion as Israeli Jews, this would almost certainly have secured Tibi's list the one seat they lost in the end.
Postscript: Partners' Executive Director Ron Skolnik discusses the results of Israel's elections as part of a panel on Shalom TV, Sunday, January 27, Noon-1:00 pm and Monday, January 28, 3-4:00 pm.
You may find this program on the web at http://shalomtv.com/secure/