On the other hand, Lapid’s positions, while generous in Israeli terms, still fall short of Palestinian demands for a full withdrawal from all of the West Bank and east Jerusalem. Lapid says east Jerusalem, home to Jewish, Christian and Muslim holy sites, must remain under Israeli control. He has also refused to say whether he accepts a freeze in settlement building, a key Palestinian demand.
In the West Bank city of Ramallah, Palestinian leaders said Wednesday they were pleasantly surprised by the strong showing by Israel’s moderates, but remained doubtful that would soften Netanyahu’s policies.
‘‘You are not going to have a savior suddenly producing instant peace,’’ said Hanan Ashrawi, a senior official with the Palestine Liberation Organization.
Opinion polls in Israel have indicated a majority favor establishing a Palestinian state alongside Israel. Yet during the election campaign, the need to reach peace was barely mentioned, reflecting widespread doubts, even among the dovish left, that peace is possible.
The outcome of Tuesday’s election shocked Israel, where Netanyahu had been forecast by all opinion polls to be cruising toward re-election at the helm of a hard-line and religious bloc.
Netanyahu’s Likud-Yisrael Beitenu alliance captured just 31 seats, down from 42 in the outgoing parliament. After the shocking setback, Netanyahu found himself answering tough questions about what went wrong.
Avraham Diskin, a political scientist from Jerusalem’s Hebrew University, said Netanyahu’s merger with former Foreign Minister Avigdor Lieberman’s Yisrael Beiteinu turned out to be a huge error. The union was supposed to create a strong rightist bloc immune from blackmail attempts of smaller parties.
In practice, Diskin said, it backfired because the parties’ constituencies have little in common. Likud appeals to traditional, religious Jews and those of Middle Eastern descent. Lieberman’s base are immigrants from the former Soviet Union. Lieberman’s indictment on corruption charges during the campaign also hurt the alliance.
‘‘This was a harsh error. It was the deciding factor,’’ Diskin said.
Netanyahu made other gaffes. His campaign, including photo ops with young smiling soldiers and stops at Jewish holy sites, appeared to take victory for granted. An attack on Bennett, the settler leader, ended up rallying sympathy for his rival, and the last-minute appointment of a popular Likud Cabinet minister to a senior government post appeared to be a desperate attempt to win over voters.
In the background, Netanyahu’s tense relations with key allies, including the United States, over settlement construction also may have concerned voters. In the weeks before the vote, Netanyahu announced plans to build thousands of new settlement homes. Last week, President Barack Obama was quoted as saying Netanyahu was hurting Israel’s own interests with the settlement construction.
On Wednesday, White House spokesman Jay Carney pushed back on the notion that Obama and Netanyahu need to recalibrate their relationship.
‘‘No leader has met more often with or spent more time on the phone with President Obama than Prime Minister Netanyahu. That relationship is strong, and it is a relationship that allows for a free and open discussion of ideas and positions,’’ Carney said.
Sima Kadmon, a veteran political columnist for the Yediot Ahronot daily, said the election results did not represent a a major shift in ideology but rather disappointment in Netanyahu himself.
‘‘There is no doubt Netanyahu is the tragic figure in these elections. Despite the huge advantage with which he set out ... he ended up as, at best, a weak prime minister whose coalition will depend on the wishes of the big winner in these elections, Yair Lapid.’’
Associated Press Writer Josh Lederman in Washington contributed to this report.