As I noted, I'm pretty far from Israel (geographically, that is), but my cell phone works in the western desert, and I've been talking to friends in Tel Aviv. A number of quick observations:
1. The stunner, for me at least: The Labor Party is dead. More than that, the peace camp is dead, or comatose, at least. According to exit poll numbers I heard, Haifa and Tel Aviv went for Livni (who is no leftist, except in comparison to Netanyahu and Lieberman); the south went for the hard right. The rockets voted, in other words.
2. Washington should prepare itself for the possibility of Avigdor Lieberman as Israel's foreign minister. This is almost-pure speculation on my part, but seems not unlikely. Netanyahu, assuming he can form a government, won't give the defense portfolio to Lieberman's party -- which leaves the foreign ministry. This isn't as bad as it sounds, since Israel doesn't have a foreign policy, just a defense policy. It's also not as bad as it sounds because Lieberman is preoccupied with Israel's Arab citizens, and not the Palestinians of Gaza and the West Bank. In fact, he seeks territorial compromise in order to rid Israel of responsiblity for these Arabs. The man does not like Arabs, in case you haven't heard. His rise brings up an obvious question for Democrats: Which Lieberman do they like less?
3. The Arab world doesn't have enough democracy; Israel has too much. Israel's is an insane system, which gives every lunatic fringe party disproportionate say in the running of the country, and therefore encourages radicalism. Lieberman is incorrigible, but if he had to exist within the framework of a center-right party, he'd be marginally less offensive.
4. Did I mention that the Labor Party, which built the Jewish state, is dead? Its only hope for relevancy is a merger with Kadima. This would have the added benefit of being good for Israel, and for people who desire negotiations with the Palestinians. Which is why it probably won't happen.