The way the election stands right now Tzippi Livni has beaten out Benjamin Netanyahu by 36,321 votes and is up by one mandate. The are all kinds of scenarios being discussed in terms of who will take over the government.
If President Shimon Peres follows tradition he will give Livni the nod to try to form the government. 3 months ago she was unable to form a government which forced the elections in the first place. She has used the election to burn down bridges making it impossible to form a government. If she fails to form the government after six weeks the oppurtunity would than be given to Netanyahu. The winner in this scenario is Olmert. We just can't seem to get rid of him.
At the moment Peres is left with a dilemna of who to choose. If he chooses Livni and the scenario plays out as expected he will have further delayed the forming of a new government, and the worst decision ever for a position that is supposed to be mostly ceremonial. If he goes to Netanyahu right away he abandons his own personal convictions as a member of Kadima, beleiver in all Peace Agreements. He also sets a danger prescedent on the use of Presidential powers.
Relief may come this evening by way of the ballot boxes. Soldiers, diplmats and hospital votes are being counted and results will be released this evening. These 150,000 votes could influence as many as 4-5 mandates. Generally, soldiers tend to be more likely to vote right. It is almost mathematically impossible for Likud to catch Kadima on total votes. It would require at least 75% of the votes to be for Likud if Kadima were not getting any. It is possible the Likud will pick up one more mandate to pull into a tie with Kadima.
Should Kadima and Likud and up in a tie, Peres should take the gift and declare Netanyahu Prime Minister. It is the easiest and most practical escape from this political quandry.