PM-designate Tzipi Livni has given up on forming a coalition government due to "extortion" from ultra-orthodox party Shas. This is potentially very bad news for the peace process. The fact is that if Netanyahu and his Likudnik allies regain control of the Israeli government, it will mean the end of the peace process. Netanyahu is to the right of where Sharon was in 2000. And there's really nobody on the left who can counter him. The Labor Party is in complete disarray, and Meretz is tiny. Kadima was supposed to be this big centrist consensus party, but after Sharon was incapacitated, it lost the gravitas it had and needed to forge a pragmatic peace deal.