Israeli PM Netanyahu scrambles to keep his job

"We have red lines. We won't cross those red lines, even if it will cost us sitting in the opposition," Peri told Channel 2 TV.

That stance could force Netanyahu to promise overtures — perhaps far more sweeping than he imagined — to get peace negotiations moving again. But a harder line taken by traditional and future hawkish allies could present formidable obstacles to coalition building.

Experience also shows that promises made during coalition negotiations do not always pan out. Yesh Atid has not yet spelled out specific conditions it would set down on this issue.

The election results surprised Israelis, given the steady stream of recent opinion polls forecasting a solid hard-line majority and a weaker showing by centrists. Netanyahu may have suffered because of his close ties to the ultra-Orthodox and perhaps from complacency. Many voters chose smaller parties, believing a Netanyahu victory was assured.

Statistician Camil Fuchs, who conducts polls for Israeli media, said previously undecided voters threw their support to Lapid in large numbers. Pollster Mina Zemah said support surged for Lapid in the last few days of the campaign, and he drew about 50 percent of his support from the right.

Lapid said the election outcome reflected a longing for unity in a country beset by schisms.

"The citizens of Israel today said no to politics of fear and hatred. They said no to the possibility that we might splinter off into sectors, and groups and tribes and narrow interest groups. They said no to extremists, and they said no to anti-democratic behavior," he said.

Tensions with the United States, Israel's most important ally, also may have factored into the shift to Lapid. President Barack Obama was quoted last week as saying that Netanyahu was undermining Israel's own interests by continuing to build Jewish settlements on occupied lands the Palestinians want for a future state.

Netanyahu has won praise at home for drawing the world's attention to Iran's suspect nuclear program and for keeping the economy on solid ground at a time of global turmoil. But he has repeatedly clashed with international allies over his handling of the peace process, which has stalled over the issue of Israel construction in Jewish settlements in the war-won West Bank and east Jerusalem.