The leader of Israel's ruling party, Tzipi Livni, gave up her attempts to form a governing coalition. Livni has been trying to put together a government since she replaced Prime Minister Ehud Olmert as head of the ruling Kadima party last month. In a live broadcast with president Shimon Peres, Livni said she would not give in to what she termed political blackmail, most likely coming from demands from the religious party, Shas.

Liron Tamam writes:

Livni's decision to stop the negotiation and to head towards general elections seems necessary. Even if she were to succeed in building a coalition, it would easily turn into fertile grounds for extortion and countless crises. Livni spared us from this.

So what now? We will finish with the local elections and head straight into national elections. Different campaigns will fall onto us from the skies, straight into the winter's muddy land, drowning us with promises. For the Likud, this is said to be the easiest elections. All he needs to do is display Kadima's accomplishments: the second Lebanon war, corruption, Gilad Shalit, damaging the Legal system, show Livni as Olmert #2 and the division of Jerusalem. Kadima, on the other hand, will tell everyone what Bibi wants us all to forget – the economy. Kamida will certainly remind us that they are supporting the majority of Israelis on the topic of returning all occupied territories. The Labor party? If there is anything left of it, will display Ehud Barak as the best defense minister. Who knows, maybe he is aiming only to be that, and not more.
…Will the labor party dismiss Ehud Barak? How long will it take Kadima to destroy itself? Will Haim Oron finally be able to motivate Meretz?

Earlier this week Livni had two options: 1) to be a prime minister in a weak government with Shas after surrendering to its requests, or 2) to create a minority-coalition which might just last several months. Tzipi Livni's refusal to agree not to negotiate over the separation of Jerusalem was at the core of her disagreement with Shas.

In an interview with TV channel 1, Knesset member Ariel Atias (from Shas) revealed that Tzipi Livni agreed to Shas’ request to provide 1 billion shequels on the condition that 600 million of this sum is directed at families with multiple children, and the rest to the different Shas institutions.

Hours later, Eli Yishai, chairman of Shas, comes out with an unprecedented attack on Kadima's negotiation team -

“hypocrites, racists and arrogant, who brought out the ethnic demons”. Yishai attacked the Kadima people after they blamed Shas for extortion. He claimed that “it is interesting that the Labor party, who received 1.5 billion shequel upon reaching a coalition agreement, was not blamed for extortion…”

Elections are currently set for February 10th. I'll be trying my best to cover all angles here on Global Voices, as this story unfolds.