Things are heating up in the Israeli election, scheduled for March. There are a number of developments in the past week.
Hatnuah, the party of Tzipi Livni, has decided to run under a temporary merger with Labour. This is not terribly unusual; Yisrael Beitenu and Likud had a one-election merger last time. This has boosted the fortunes of Labour and the party is now a real competitor for finishing in first place. One can presume that Yesh Atid, the party of Yair Lapid; who along with Livni was fired from Cabinet causing this snap election, would align more with Labour than with Likud.
There is some suspicion that two of the arab lists may combine to ensure seats are won. UAL and Ta'al already run under a combined list, but they may be looking to run along with Balad under a single list. Hadash, the other "Arab" party of note is, in part, a merger of the Communist party, and has enough very minor support among the Jewish community to usually scrape by with a few seats.
I've done more research on a few parties. Jewish Home appears to be a "modern" right-wing party, in contrast to parties like Shas or the UTJ, which are much more religious in their outlook. In this, they fit better with parties like Yisrael Beitenu.
I expect a few things to happen when the results come in and the coalitions are made.
1 - Yisrael Beitenu and Jewish Home will end up on the same side, either both in government, or both in opposition. While the two parties don't seem to have any particular love for one another, they have enough similar stances on the issues that they will likely end up as an unintentional and unofficial bloc.
2 - Yesh Atid will end up on the same side as Labour. For similar reasons as above, these groups have enough in common that it is very likely we will see them on the same side once all the ballots are counted.
3 - Shas and UTJ will both end up sitting opposite to Likud. Due to the hostility from Jewish Home, I can't see them sitting in a right-wing government.
With this in mind, the current prediction looks a bit like this
32 - Liberals (Labour and Yesh Atid)
26 - Nationalists (Yisrael Beitenu and Jewish Home)
20 - Conservatives (Likud)
15 - Religious (Shas and UTJ)
10 - Arab Parties
7 - Progressives (Meretz)
It is likely that the Liberals and Progressives would sit together, for 39 seats, while the Conservatives and Nationalists would likely take 46
Interesting is the potential Kingmakers, the Kulanu party lead by Moshe Kahlon. Kahlon seems to be on a path similar to Ariel Sharon and has been moving to the left on peace issues.
How all of this plays out will remain to be seen, of course.