Israeli Prime Minister Ehud Barak’s surprise resignation on Saturday, December 9, has plunged the country’s already battered political system into further turmoil.

Barak’s move was clearly designed, at least in part, to utilise a provision in Israeli law that would sideline his once and would-be opponent Benjamin Netanyahu from running in a special election for Prime Minister on February 6. Moreover, Barak hoped that by avoiding a general election, he could avert the reconfiguration of the Knesset since polls show that if elections were held today, it would become a more rightward-leaning body.

While polls have shown Barak trailing Netanyahu by twenty points, he is preferred when voters are asked to assess the candidates’ personal moral character and integrity.

Yet any attempt by Barak to exclude Netanyahu from the race, just days after saying that such a manoeuvre would be cowardly and never crossed his mind, could hurt him among undecided voters. The strategy will have incurred a political price.

Indeed, on December 19, the Knesset passed a preliminary reading of a bill that would enable Netanyahu to run for the premiership. However, the Knesset declined to dissolve itself, which would have led to a parliamentary election, and Netanyahu, who said he would only run if there were Knesset elections as well, withdrew his candidature.

The move to amend the direct election law in order to permit a citizen (i.e., Netanyahu) to run for Prime Minister, known as the "Netanyahu amendment" quickly gathered steam, but a key opponent of this amendment was Netanyahu himself. He and his supporters preferred the dissolution of the Knesset, hoping to take advantage of popular disillusionment with Barak’s handling of the ongoing violence to build a comfortable governing majority. Under law, if the Knesset is not dissolved, only MKs (members of Knesset) that are already in office are eligible for the premiership in an election that is held sixty days later.

The key to the dissolution of the Knesset was the same party that has held the balance of power in Israel for much of the last decade – the Sephardi/Religious Party, Shas, which would like to have Netanyahu back in power for a couple of reasons. First, its grassroots are hawkish; second, the party profited greatly from the state’s largesse during the Netanyahu years.

Yet Shas did not want early elections because polls indicated many of its North African voters could swing back to the Likud. This would reflect the shift of the agenda for this election back to war and peace and away from issues which competed for attention in 1999, such as secular-religious and socio-economic questions. Therefore, a "Netanyahu law" fix enabled Shas to have it both ways. However, in the end, Shas’s bid to have it both ways does not appear to have succeeded.

While the fear of landslide has Laborites instinctively opposing general elections, Barak needs to look at two counterveiling factors as well. Should Barak win in a special election for premiership, he will likely find himself atop the same sort of deadlocked government that has existed for months. In the 1996 and 1999 elections, both conducted under the direct election law, candidates for the top post have neglected the Knesset vote. This has been at their peril. Netanyahu’s Knesset majority collapsed after two and a half years in power, and Barak’s majority collapsed after eighteen months.

Israeli politicians recognise the political problem revealed by the instability of the past two governments, and the Knesset is to remain in session until late December in an attempt to pass electoral reform laws. The most likely change would be a return to the system that applied before 1996, that is, election of Knesset factions only, with no direct election of the Prime Minister.

Yet, there is another reason Barak should be concerned with a prime ministerial election as opposed to a general election. A special election for Prime Minister would mark the first time that Israeli Arabs would be asked to vote for a Zionist candidate without also having the opportunity to cast a ballot for their own party list (Of course, if an Arab candidate runs for premiership, as is possible, this scenario would not hold unless there was a runoff).

Within a day of his announcement, the Labor Central Committee endorsed Barak as its candidate, thereby preempting internal challenges from dovish elements. However, it now appears possible that former Prime Minister Shimon Peres will run against Barak and Sharon in the national poll, breaking with the Labor party. He would be sponsored by several Knesset factions to the left of Labor, especially Meretz.

There will also likely be one or more Israeli Arab candidates for the Prime Ministership. While the Knesset factions with primarily Arab constituents have had several meetings to attempt to agree on a single unifying candidate, they were still unsuccessful as the December 21 nomination deadline loomed. Possible candidates include Ahmed Tibi, a former advisor to Yasser Arafat and Dr Azmi Bishara, a pro-Syrian legislator who ran in the last election.

Palestinian Authority Chairman Yasser Arafat’s official reaction to Barak’s announcement has been that the Israeli election campaign puts the peace process on hold. In fact, the election was precipitated by Barak’s decision to go to the Camp David summit in July. At that moment, Barak’s coalition crumbled. Since then, the Al-Aqsa intifada further undermined Barak’s efforts to create a set of ad hoc political arrangements that would enable him to govern with a Knesset majority.

Barak’s aides think a peace agreement could help him win the election, and there was a flurry of contacts the week of his resignation – including secret efforts coordinated by French foreign minister Hubert Vedrine – to test whether some sort of a deal is possible. Following these talks, and a meeting between Yasser Arafat and Israel’s acting Foreign Minister Shlomo Ben-Ami, Israeli and Palestinian negotiators set out for Washington on Dec. 18 for parallel talks with American mediators. These talks about talks, dubbed a "pre-dialogue," do give Barak a greater reason to hope some sort of deal with the Palestinians can be struck before the Israeli elections, but most analysts are sceptical.

Clearly, Barak hopes that the early deadlines of an election coupled with the spectre of the return of Likud will concentrate Arafat’s mind about the price the Palestinians will pay for not doing a deal with Israel.

There are indications to suggest Barak’s resignation was also designed to force Arafat’s hand during the waning days of the Clinton Administration, which has been intimately involved with the peace process, rather than allowing him to delay several months while the Bush Administration gets organised. Israeli foreign minister Shlomo Ben-Ami said that Clinton is likely to visit the region before the Israeli election.

However, there are some Palestinians who believe a Likud victory will ultimately serve Palestinian interests – that it will engender sympathy in the international community, especially as the Palestinians seek European recognition for a unilateral declaration of independence.

If Arafat does head for a deal now, he will need to be careful not to act like the "kingmaker" of Israeli politics. Palestinians will be tempted to overreach, imposing stiff terms that would make Barak vulnerable to attacks that he is signing a deal to lift his sagging electoral fortunes rather than focusing on the good of the country.

Even if a peace deal is not reached at this moment of heightened regional tension, the upcoming election is likely to be more focused on war and peace than balloting in the recent past. Sharon will charge that there is a peace paradox, arguing that Barak’s generous offer at Camp David encouraged Arabs to use violence as a tool to win even more concessions. In contrast, Barak will likely charge that amid the continuing violence, a Likud victory will make it more likely that the region will slide to war.

David Makovsky is a senior research fellow at The Washington Institute for Near East Policy and a former editor of The Jerusalem Post.