The leaders of Israel’s main parties on Wednesday began the arduous process of assembling a new government, and resolving the political gridlock created by Tuesday’s inconclusive general election.

But as the political haggling began, officials and analysts outside the country sought to work out the consequences of the election – which handed a narrow victory to Tzipi Livni, the leader of the centrist Kadima party – for Israel’s stalled peace talks with the Palestinians and with Syria.

Although Kadima captured one parliamentary seat more than its nearest rival, the rightwing Likud party under Benjamin Netanyahu, he is seen as having a better chance of forming a coalition government because of the overall rightward shift in the 120-seat Knesset.

The rightwing parties’ gains represent a possible new obstacle for Barack Obama’s goals of increasing confidence between Israelis and Palestinians and building on the 2002 Arab peace initiative, which the US president has praised.

Mr Netanyahu has been much less committal than Ms Livni about a two state solution with the Palestinians, the cornerstone of that initiative.

Highlighting the importance of that goal for the US, Mr Obama on Wednesday called Shimon Peres, Israel’s president, and commended him on his “strong commitment to achieving a two state solution”. The US state department said: “We certainly hope that a new government will continue to pursue a path to peace,” stressing that George Mitchell, Mr Obama’s envoy, would visit the region again this month.

“One has to be very careful …it is a very sensitive time,” said the department. “Yes, it would be nice to have an Israeli government in place …But there’s still a lot of work for Mitchell to do in the region in terms of consulting with others.”

Mahmoud Abbas, the president of the Palestinian Authority, struck a hopeful note. He told La Repubblica, the Italian newspaper: “The ascent of the Israeli right does not worry us …In whatever form, the government, once in power, will ultimately end up with responsibility, pragmatism prevailing.”

Yisrael Beiteinu, the far-right party that came third behind Kadima and Likud, was the focus of attention on Wednesday as Likud and Kadima sought to build support. Avigdor Lieberman, its leader, met both Ms Livni and Mr Netanyahu, in a sign he will have a key role in deciding who will emerge as prime minister.

Mr Lieberman did not make any commitment, but said Yisrael Beiteinu wanted a “nationalist” and “rightist” government – suggesting Ms Livni may have a hard time winning his party over to a centrist coalition.

Ms Livni said her victory made her the natural candidate to succeed Ehud Olmert as prime minister. “The people chose me in droves. I feel a great responsibility to translate the power that has been given to me into action, to advance the country and to unify the people.”

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