AN early Israeli election may kill off more than George W. Bush's hopes of a peace deal with Palestinians this year. It could bring a right-wing government hostile to peacemaking by his successor in the White House. Foreign minister and new ruling party leader Tzipi Livni's failure to form a new government, starting the countdown to a likely election in February, will have the immediate effect of further sidelining faltering peace talks that the US president hoped would bolster a legacy burdened by the war in Iraq. But diplomats and analysts said the election could have implications far beyond Bush's term, citing opinion polls showing a big lead for the right-wing opposition Likud party of former Prime Minister Benjamin Netanyahu, who had criticised many of the peace proposals that Livni and outgoing Prime Minister Ehud Olmert have made with US encouragement. “We're deeply worried,” said one senior Western diplomat in Jerusalem, speaking anonymously because he did not want to be seen interfering in Israeli politics. “This may spell the end of the diplomatic process, and not just in the near term.” A senior aide to Palestinian President Mahmoud Abbas predicted an early Israeli election would put the peace process “on hold for half a year, at least”. Though there have been few outward signs of progress since Bush helped relaunch the talks nearly a year ago at a peace conference in Annapolis, Maryland, spokesmen for Olmert and Livni said they would press ahead with the process through election day and beyond if their centrist Kadima party wins. Both leading US presidential candidates have voiced support for the talks, though Palestinians and many Israelis see Democratic nominee Barack Obama as more likely than Republican John McCain to press Israel to make concessions. Obama has criticised both Bush and his predecessor Bill Clinton, a Democrat, for waiting too long in their eight-year presidencies to make a big push to achieve Middle East peace. “There is a consensus that the Annapolis process should continue,” said Ramiro Cibrian-Uzal, the EU envoy to Israel. “Whatever achievements have been made, it is very important that they are protected, safeguarded and handed over.” Last-minute push? Gilead Sher, who served as a top Israeli negotiator with the Palestinians from 1999-2001, dismissed conventional wisdom that a lame-duck administration like Olmert's cannot cut a deal. “It may be conventional but it sure is not wisdom,” Sher said. “We might be living in the final couple of years when a two-state solution will be possible. We don't have the luxury of letting the status quo prevail.” Instead of pulling back, Sher said Olmert and Livni should in the three months or so that remain to them as caretaker leaders “identify the major issues in which a basic understanding might be reached within the foreseeable period of time and work for attaining that 24/7”. But doing so could invite a political backlash against Kadima in any race against Netanyahu and alienate potentially critical coalition partners on the political right, said Raanan Gissin, a long-time adviser to former Prime Minister Ariel Sharon, who quit Likud to found Kadima in 2005. “You can continue managing the negotiations. You can continue meeting and talking. But when you are in the twilight zone of new elections, you don't make major decisions,” he said. Doing otherwise, Gissin added, would be seen as “inappropriate -- legally and morally”. Seeking to head off any pre-election push for a peace deal, Gideon Saar, a senior Likud lawmaker, told Israel Radio that he would bring forward legislation to bar Olmert from negotiating or signing agreements that include territorial concessions. It is unclear how much support such a bill would garner. Olmert has supported an Israeli withdrawal from almost all of the occupied West Bank, including Arab East Jerusalem, where Palestinians want a capital for a future state. Netanyahu is using the slogan: “Likud will keep Jerusalem”. Shlomo Ben-Ami, who was Israel's left-leaning Labour foreign minister when the previous round of peace talks collapsed in 2001, said he saw little chance of a breakthrough with the Palestinians, either now or under a future government. Despite Netanyahu's vocal public criticism of Olmert's negotiations, Ben-Ami pointed to signs the Likud leader was courting more centrist figures “in a way that might convey the message that there is room for political manoeuvring”. But the real problem, Ben-Ami said, is Israel's fragmented party system, which gives tremendous clout to small, special interest groups in parliament to make or break governments. Barring “very robust” US pressure on the parties to make more far-reaching concessions, Ben-Ami concluded: “The Israeli political system is utterly incapable of reaching a settlement with the Palestinians.” – Reuters __