From "King Bibi" to kingmaker Lieberman?

By Stephen Farrell

JERUSALEM (Reuters) - Half a year ago one man stood alone and unchallenged on the summit of Israeli politics - the veteran right-wing populist Benjamin Netanyahu, known as "King Bibi" to his loyal followers.

But on Tuesday Netanyahu failed, for the second time since April, to secure a clear victory in parliamentary elections. And now all eyes are turning to a former Netanyahu aide who stood up to his former boss five months ago, and may now decide whether the Netanyahu era continues, or comes to an end.

The potential new kingmaker is Avigdor Lieberman, a far-right immigrant from Moldova who lives in an Israeli settlement in the occupied West Bank and who served as an aide to Netanyahu during the 1990s.

Lieberman, 61, has none of Netanyahu's polish and international prestige, but took a huge gamble by refusing to join a Netanyahu coalition government on a point of principle in an election last April.

If exit polls and early vote tallies prove correct, he reaped the reward by boosting his party's seat numbers in the Sept. 17 rerun.

"Lieberman will again tip the balance," the liberal Haaretz daily said in a banner headline after Tuesday's vote.

A partial tally showed the conservative Netanyahu tied with his centrist rival Benny Gantz. Neither has enough support from like-minded parties to create a coalition with a clear parliamentary majority. That has left both relying on Lieberman.

"The conclusion is clear - all that we have said during the election campaign is coming true," he told reporters on Wednesday. "There is only one option - a national unity government, a liberal, broad government, and we will indeed say again, we will not join any other option."

SECULAR VS. RELIGIOUS

Lieberman, a former defense minister under Netanyahu, made his stand on the long-standing divide within Israel between its secular and ultra-religious communities.

He refused to serve alongside ultra-Orthodox Jewish parties who have long been allies in Netanyahu-led ruling coalitions, and who wield influence over everyday life in Israel, including the administration of marriage and divorce.

Lieberman's determined secular stance played well with other secular Israelis, including his fellow immigrants from the former Soviet Union, many of whom are not deemed Jewish according to strict ritual law.

Lieberman originally belonged to Netanyahu's Likud Party but quit it to form the far-right Yisrael Beitenu (Israel is our Home) in 1999, appealing to fellow Russian-speakers with his secularist agenda and tough talk against Palestinians.

Lieberman is now pushing for a "national unity" government that would include his own party, which is predicted to take 9 of the parliament's 120 seats, alongside Likud and Gantz's Blue and White party, forecast to have around 32 seats each. The final tally may not be known for days.

Where Netanyahu fits into the new picture is anyone's guess. Gantz, a centrist former army general, has said he is open to teaming up with Likud, but not if it is led by Netanyahu.

During months of campaigning Gantz excoriated Netanyahu over long-standing corruption allegations.

Netanyahu, who denies wrongdoing, is set for a pre-trial hearing next month. He is expected to argue that the charges should be dismissed in the national interest, and his critics believe that is a key motive for him seeking so strenuously to continue his premiership into a record fifth term.

TIMELINE TO SHOWDOWN

Lieberman served in several Israeli cabinets, most recently as Netanyahu's defense minister. But he resigned from that post last year, protesting at what he saw as government weakness in the face of rocket attacks by Palestinian Islamists in Gaza.

That walkout destabilised Netanyahu's coalition, and ultimately led to the April election, in which Lieberman won five parliament seats.

Netanyahu, a master coalition-builder, was widely expected to repeat his past successes in putting together a government. But he was blindsided when Lieberman refused to lend his support, citing his dissatisfaction that many ultra-Orthodox are granted exemptions from service in the Israeli military.

That gambit improved Lieberman's standing - raising his profile, potentially doubling his seats and, early indications suggest, extending his popularity beyond his original base of ex-Soviet immigrants.

With campaign billboards reading “Make Israel Normal Again”, Lieberman’s secular-nationalist platform included support for Jewish settlements in the West Bank. Most world powers deem the settlements as illegal, a view disputed by Israel.

Lieberman, who as a younger man worked as an airport baggage handler and bar bouncer, seemed at ease while electioneering. Netanyahu, ubiquitous on the airwaves and social media, emerged from the campaign hoarse and subdued, giving a downbeat post-election address that neither claimed victory nor conceded defeat.

Lieberman said he did not rule out Netanyahu as a political ally or underestimate a leader whose supporters still regard him as a “magician”.

"(But) I will not go to a Halacha government,” he said, in a reference to Jewish ritual law and ultra-Orthodox party participation in a coalition.

(Editing by Mark Heinrich)