Israel's new Likud-Kadima unity government is a bold initiative that opens the way for interesting developments, both domestic and external. There is logic in the coalition of the two parties. Kadima is in a real sense the child of Likud - a hard-line party, which itself softened its ideas with time and experience. Kadima embodied a hard-nosed look at demographics - the realisation that it was not in Israel's best interests to continue governing a huge Arab minority that could easily turn into a majority. Thus was born major non-Labour support for the two-state solution.
Talk of a possible conjoining of Israel's Likud and Kadima parties was in the air as early as July 2010 (see my blog of 9 July 2010: 'A Peace Deal by 2011?' ). But with Tzipi Livni leading Kadima the idea came to nothing. She was intent on remaining the official opposition, hoping for a political opportunity - that frustratingly remained out of reach - to oust Likud and take over the reins of power. Her replacement as chairman of Kadima by Shaul Mofaz has opened the door to this new configuration of Israel's political kaleidoscope.
A major effect must be to reduce considerably prime minister Netanyahu's dependence on the support of the religious right-wing parties. They - in particular, but not exclusively, Yisrael Beitenu - not only consistently restricted his freedom of manoeuvre during the peace negotiations of 2010, but placed positive obstacles in his path.
The main reasons for forming this new alliance are internal and domestic - to do with devising new rules for ensuring that most young haredi men undertake some form of national service - but the new unity government will inevitably adopt a new approach to any peace initiatives that might arise between now and the autumn of 2013, when a general election becomes mandatory. Neither Likud nor Kadima offer the same hard-line support for the settler movement as the more right-wing religious parties. This in itself will open the way for greater flexibility, should any moves towards new peace negotations make an appearance. Let us hope they do.