2006 Israeli legislative election

In the 2003 elections, Likud, under the leadership of Prime Minister Ariel Sharon, achieved a convincing win by Israeli standards, winning 38 seats in the 120-member Knesset (parliament), with Sharon perceived as tough anti-terrorist leader on the wings of his 2002 Operation Defensive Shield. Labor, led by Amram Mitzna under slogans for "disengagement" from Gaza, won only 19 seats and did not initially join the new government.

Following the 2003 elections Likud suffered severe divisions over several positions taken by Sharon, most notably his adoption of a plan to withdraw Israeli settlers and troops from the Gaza Strip.[1] This was exactly the position taken by Labor and denounced as being defeatist by Sharon prior to the 2003 elections, so it caused tension within the Likud party and in January 2005 Shimon Peres led Labor into a coalition with Sharon to allow the Gaza withdrawal to proceed despite opposition from a majority of Likud members.

As of the fall of 2005, Peres's Labor Party was providing the votes necessary for the Likud-led 30th Government to maintain its majority support in the Knesset. In Labor's internal leadership election scheduled for early November, Amir Peretz campaigned for the party leadership on a platform that included withdrawing Labor from the Sharon-led coalition. Peretz narrowly defeated Peres in the leadership election on November 9, 2005, and two days later all Labor ministers resigned from the Cabinet and Labor withdrew its support for the Government, leaving it without majority support in the Knesset.

Negotiations between Sharon and Peretz set the election date for 28 March 2006. "I'm letting him [Sharon] choose a date in that period between the end of February and the end of March and whatever date he chooses is acceptable to me, the earlier the better," Peretz said at the time. Sharon said: "As soon as it became clear that the existing political framework was falling apart, I came to the conclusion that the best thing for the country is to hold new elections as soon as possible."

The impending elections raised the prospect of a leadership election within Likud, with former Prime Minister Binyamin Netanyahu expected to challenge Sharon for the party leadership. In late November, Sharon and a number of other Likud ministers and Knesset members announced that they were leaving Likud to form a new, more centrist party, which was eventually named Kadima. The formation of Kadima turned the election into a three-way race among the new party, Labor and Likud, marking a shift from Israel's tradition of elections dominated by two major parties.

Although Kadima was formed primarily of former Likud members, Peres (having lost the Labor leadership election to Peretz) also announced his support for the new party, and later officially left Labor. Peres cited Sharon's leadership skills as a reason for his party switch.

Polls taken through the end of 2005 showed Sharon's Kadima Party enjoying a commanding lead over both Labor and Likud.

Sharon, as founder of Kadima and incumbent Prime Minister, was universally expected to lead the new party into the March 2006 election. However, on 4 January 2006, Sharon suffered a haemorrhagic stroke, leaving him in a coma. On 31 January 2006, Kadima submitted its list of candidates, with Sharon excluded from the list due to his inability to sign the necessary documents to be a candidate. Ehud Olmert who had become Acting Prime Minister and acting chairman of Kadima when Sharon became incapacitated, now officially became the new party's candidate for Prime Minister. Peres was placed second on Labor's list of candidates. Foreign Minister Tzipi Livni was placed third on the Kadima list, with the understanding that she would be the senior Vice Premier if Kadima formed the next government.

In the Shinui primaries, Tel Aviv council member Ron Levintal defeated Avraham Poraz for the number 2 spot. Poraz, a close ally of party leader Yosef Lapid, subsequently resigned from Shinui, as did most Shinui Knesset members, forming a breakaway party called Hetz (ha-Miflaga ha-Hilonit Tzionit or 'the Secular Zionist Party'). Lapid resigned as party leader on 25 January 2006, and Leventhal was subsequently elected the new party leader. Neither Shinui nor Hetz received sufficient votes to win any seats in the 17th Knesset. Shinui had won 15 seats in the 2003 election and was the third largest party in the 16th Knesset.

On 30 January 2006 the right-wing National Union (Halchud HaLeumi), a coalition of three small parties (Moledet, Tkuma, Tzionut Datit Leumit Mitchadeshet), submitted a joint list with the National Religious Party. The merged list is headed by Binyamin Elon. The largely Russian immigrant Israel Beytenu (Israel Is Our Home) party has separated from National Union and is running a separate list.

This separation occurred following polls that predicted that, when running separately, these two major rightist blocs would receive between 20 and 25 seats (in the previous elections, they had received only 7), and it turned out to be true: the National Union bloc received 9 seats and Israel Beytenu received 11.

Likud selected Netanyahu as its leader, over then-Defense Minister Silvan Shalom. At Netanyahu's insistence, Shalom and the other remaining Likud ministers resigned from the Olmert-led government in January 2006.

Polls conducted from January through March showed Kadima still enjoying a substantial lead, though somewhat reduced from polls taken under Sharon's leadership.

During the al-Aqsa Intifada, more than a thousand Israelis were killed in Palestinian militant attacks. Israel's security policy during that time was focused on arresting or killing members of the militant organizations, through frequent military excursions into the Palestinian territories and (somewhat controversially) targeted killings, and to curb the movement of suspected militants – especially would-be suicide bombers – through the use of checkpoints. This policy won the support of the Jewish mainstream, but elements in the Jewish left, as well as the vast majority of the Arab population, vehemently opposed what they saw as excessive response to the security threat. Some claimed that Israel's policy was in fact encouraging more violence from the Palestinian side. Despite the decrease in violence during 2005 and 2006, or perhaps because of it, popular support for the security policy remained high among the Israeli public, which continued to fear suicide bombings and Qassam rocket attacks.

During the 2006 electoral campaign, the center and right parties vowed to continue the relentless fight against the Palestinian militants. Even Labor, which was traditionally known for its dovish views, put "combating terrorism" at the top of its agenda on the Conflict. Opposition to the current security policy, especially the use of targeted killings and the existence of checkpoints on Palestinian soil, comes mainly from Jewish left parties such as Meretz and from the Arab parties.

In the wake of the disengagement plan, the political field in Israel split into two roughly distinct groups: those who are in favour of withdrawing from most or all of the West Bank (unofficially nicknamed "Blues"), and those who wish for that area to remain under Israeli control (so-called "Orange"). In particular, Ariel Sharon and his faction left Likud to form Kadima because of their support of ending Israeli control over the West Bank. However, the two groups are also divided internally as to what practical steps need to be taken during the next few years.

• Meretz supported bilateral negotiations as the only path towards peace.
• Labor and Kadima both advocated further negotiations, but the supposed non-existence of a partner for peace on the Palestinian side (following Hamas victory in the 2006 Palestinian elections) brings them to strongly consider "shaping Israel's permanent borders" through a unilateral withdrawal from most of the West Bank, leaving in place the large settlement blocs and the Jewish neighbourhoods in East Jerusalem. These borders will be marked by the completed separation barrier. Kadima leader Ehud Olmert used the term "Convergence Plan" (תכנית ההתכנסות).
• Yisrael Beytenu supported continued Israeli control of most settlements, but offers to cede some Israeli Arab cities and uninhabited territories to the Palestinian Authority in exchange.
• Likud advocated an expansion of the separation barrier to include more territory on the Israeli side, and continued Israeli control of the Jordan Valley, the whole of Jerusalem and the settlement blocs.
• National Union-National Religious Party vehemently opposed any more unilateral withdrawals, and supports the strengthening of Jewish settlements in the West Bank.
• Herut – The National Movement and the Jewish National Front, two fringe nationalist groups, supported a massive population transfer of the Arabs under Israeli control – both Palestinians and Israeli citizens – to neighbouring Arab countries as a solution to the conflict. While Herut supports "voluntary transfer" through the creation of a compensation mechanism, the Front does not rule out forced transfer.

Peretz Labor campaign billboard in Tel Aviv, "Ki Higi'a Hazman" – "Because The Time Has Come"

Since Israel's establishment, the political scene has been dominated by security and peace issues. The major parties were mainly divided by the different approaches with regard to the Arab–Israeli and Israeli–Palestinian conflicts.

The 2006 elections mark the first time a major party – the Labor Party – has placed economic and social issues on top of its agenda. This is mainly attributed to Amir Peretz's surprise victory over Shimon Peres in the November 2005 Labor leadership election; Peretz had left the party a few years earlier to form the socialist One Nation, which had only recently merged into Labor.

Labor's social democratic approach, which includes promises to raise the minimum wage and allocate a pension for every worker, now stands in sharp contrast to the neo-liberal agenda promoted by Likud leader Binyamin Netanyahu. Serving as Finance Minister from 2003 to 2005, Netanyahu led a policy that encouraged economic growth and lower taxes at the expense of Israel's long-running welfare mechanism. This has alienated him from many Likud supporters, which traditionally hail from the lower and middle classes. In the campaign, Netanyahu claimed to have done this to "save the Israeli economy from collapse."

In addition to Labor, the orthodox religious Shas, which has always claimed to champion the poor in Israeli society, also attacked Netanyahu's policies during the campaign, as did a number of small (and often new) socialist parties.

From 1948 to 2003, religious parties played a part in every coalition formed in Israel. Zionist religious parties focused on maintaining the balance between observants and seculars in issues such as education, Kashrut, keeping the Sabbath, and matrimonial law, while Haredi parties demanded funds for religious scholars and the continued exemption of their followers from military service (decided on by David Ben-Gurion in 1951.) All of this alienated many secular Israelis, who felt their personal freedoms were being infringed upon, and that they were unfairly carrying most of the burden. This led to the rise of Shinui, which at the 2003 elections won 15 out of 120 seats and joined Ariel Sharon's coalition. Shinui failed in making significant changes to the status quo on religious issues, and quit the government in 2005 after Sharon decided to transfer funds to the ultra-Orthodox United Torah Judaism party. An internal quarrel caused most Knesset members from Shinui to form a new party (Hetz); both parties ran in the 2006 elections, although neither of them received any mandates.

Shinui, Hetz, Meretz, and Ale Yarok wish to promote what they see as key secular and democratic principles:

• Allowing businesses to remain open, and public transportation to operate, during the Sabbath;
• Abolishing the Orthodox monopoly on conducting marriage and divorce between Jewish couples (which in fact prevents some couples from getting married in Israel) by instituting civil marriage, including for same-sex couples;
• Allowing the public sale of pork (forbidden under Kashrut laws);
• Committing ultra-Orthodox religious scholars to military service.

The various religious parties, both Zionist (National Religious Party) and Haredi (Shas, United Torah Judaism) strictly oppose these changes. They wish to see Israel's Jewish character strengthened through further enforcement of the Sabbath and changes in the educational system.

Israeli Arabs constitute roughly 20% of the population in Israel. Many Israeli-Arab groups claim continued institutional and social discrimination against them in Israel. Because they are not Jews and many identify ethnically with Palestinians their identity often clashes with their citizenship in the Jewish state. There are large disparities in general living standard and education between Israeli Arabs and the non-Arab Israeli population; they also have a lower participation rate in the workforce. Discrimination and a lower proportion of females in the workforce are often cited as reasons for this.

The Arab parties, the largest of which are the United Arab List, Balad and Hadash (a Jewish-Arab communist party, with mostly Arab composition and electorate), advocate abolition of all forms of ethnic inequality, and the establishment of a democratic bi-national state.