Israel election: Key players and issues

Israelis head to the polls on Tuesday (March 17, 2015) in a vote seen as a referendum on embattled Prime Minister Benjamin Netanyahu, who ruled out a Palestinian state as part of a last-ditch appeal to right-wing voters.

Here's a look at how the race is shaping up, the key players and issues:

Poll predictions

Mr Netanyahu faces a challenge from a centre-left alliance that has promised to repair ties with the Palestinians and the international community. Neither side is expected to get more than a quarter of the votes.

In the past week, most polls have shown a three to four-seat gap between the Zionist Union led by Mr Isaac Herzog and Ms Tzipi Livni, and Mr Netanyahu's Likud Party. An amalgamation of seven recent surveys conducted by pollster Project 61 on March 10 showed the Zionist Union winning 24 seats compared with 21 for Likud, with a Tuesday poll giving the Zionist Union a four-seat advantage.

But even if the Zionist Union wins the election, it would struggle to form a coalition, whereas Mr Netanyahu would have no problem piecing together a government of religious, right-wing and centrist parties.

Benjamin Netanyahu

Mr Netanyahu, 65, heads the right-wing Likud party and is seeking a third consecutive term, his fourth overall. The son of a Zionist historian, Mr Netanyahu presents himself as the guardian of Israeli security against Iran and radical Islam. Educated in the United States, he served in Israel's special forces and is considered close to the American school of neo-conservative politics.

He has a reputation for negotiating the volatile party system with skill, but his best efforts failed to maintain a stable parliamentary majority in the Knesset elected in 2013. His broad coalition collapsed in late 2014, prompting the current election.

He has a strong following in Likud, based on his impressive electoral record and his hawkish stance on Iran and the question of a settlement with the Palestinians. But these qualities, combined with his forceful personality, nationalist rhetoric and association with economic liberalism, also make him a divisive figure little liked on the left.

Isaac Herzog

The head of the opposition Labor Party, Mr Herzog joined forces with the centrist Hatenuah led by Ms Tzipi Livni to form the Zionist Union in December. A 54-year-old lawyer and son of Israel's sixth president, Mr Herzog has been a member of parliament since 2003 and has held several cabinet posts.

A social rights activist, he has repeatedly called for the creation of a Palestinian state alongside Israel. He has continued Labor's traditional opposition to Likud's economic polices, accusing the government of depressing Israeli living standards, and has also campaigned aggressively against Mr Netanyahu's foreign policy and alleged neglect of the Palestinian issue.

Despite his political pedigree, critics accuse Mr Herzog of lacking charisma.

Tzipi Livni

A former justice minister and chief peace negotiator, Ms Livni was sacked by Mr Netanyahu in December for "acting against the government from within" after opposing a controversial bill aimed at enshrining Israel's status as the Jewish state in law.

The 56-year-old lawyer is a former undercover agent for the Mossad spy agency and a one-time foreign minister who cut her political teeth with Likud. Often described as Israel's most powerful woman and compared with former prime minister Golda Meir, Livni has defied her staunch nationalist background and become convinced that the only way to preserve Israel as a Jewish state is to relinquish at least some of the land occupied in the 1967 Six Day War.

5 key tasks for the next PM

1. Mend ties with the United States

There have been many stumbling blocks in Israel-US relations, ranging from settlement construction, failed peace talks with Palestinians to Israeli military action in Gaza and Lebanon. Relations hit a low point recently when Mr Netanyahu, in a speech to US Congress, criticised President Barack Obama's policy towards Iran.

While Mr Herzog has pledged to "restore intimacy and trust" with the US leaders, Mr Netanyahu's attitude towards Washington is likely to remain the same. US officials have warned the level of Washington's political support for Israel with allies and at the United Nations could be affected by Mr Netanyahu's attitude.

2. Confront Iran on nuclear issue

World powers are working toward a framework nuclear deal with Iran before the March 31 deadline. The next Israeli prime minister will take office shortly before a July deadline for a final deal and will need to reach key understanding with the US on what security and diplomatic guarantees Washington will provide Israel if the deal goes forward. Israel will also want input on what constitutes a violation of the deal and what would trigger punitive measures if Iran reneges.

If Mr Netanyahu remains in office, his differing perceptions of the threat posed by Iran will undoubtedly come to a head as that deadline approaches. He has warned that the agreement would pave the way for a "potential nuclear nightmare" and leave Iran with materials and expertise to quickly break out and build a nuclear weapon. In comparison, Mr Herzog has said he would work closer with the US and other governments to strengthen a deal, rather than try and block it.

3. Resolve conflicts with Palestinians

The breakdown last April of peace talks led the Palestinians to take unilateral steps in international forums. For example, they applied to become a member of the International Criminal Court and to pursue war crime charges against Israel. In response, Israel imposed a freeze on US$127 million (S$174 million) of the monthly tax revenue which it collects for the Palestinian Authority from custom and excise duties. The move strained the cash flow of the Palestinian government which is suffering from chronic financing problems.

Now the Palestinians are threatening to stop security cooperation with Israel. Coupled with a lack of a viable peace process and a potential economic collapse of the Palestinian Authority, the lack of security coordination would present a total breakdown of cooperation between the two sides.

4. End Israel's isolation on the world stage

Mr Netanyahu's aggressive style has been cited as a major factor in strained ties with the US and Europe. Israel faces growing worldwide frustration over its policies towards the Palestinians, particularly settlement construction. The European Union, Israel's largest trading partner, is in the process of cancelling tax exemptions on Israeli products made in settlements in the occupied West Bank and is considering plans to label the origin of other products made in settlements.

5. Address growing social inequality

The high cost of living has emerged as a major focus in this election. Sky-high housing prices and rising food prices are two of the concerns. In December, Israeli news website Walla scanned more than 500,000 social media posts which showed that social-economic issues were twice as important as diplomatic or security concerns.