Maybe, maybe not. The bad news for Likud: They finished weaker than expected, slightly behind Tzipi Livni and Kadima. The good news: Israel Beitenu, led by hardliner Avigdor Lieberman, finished a strong third. David Hazony breaks it down:

Of the four major parties today, three of them are Likud and its spin-offs: Kadima was founded by Ariel Sharon and is mostly made up of former Likudniks; Yisrael Beitenu’s chairman cut his teeth as the head of the Likud’s central committee. Not only this: The classic parties of the pro-peace camp in Israel are but a tiny shadow of their former selves: Labor, which for decades, until as recently as 1996, led the country, is down to the lower teens. Shinui is gone. Meretz, the far-left party, is down from 10 seats in 1999 to around 4. If we call Kadima centrist, then the left in Israel as a whole will not break 20 seats…

That’s the real story here. The Right is bigger than the Left, and the Left is mostly Kadima, which is really not very Left at all. President Shimon Peres knows this all too well. My guess is that we will not know who the next Prime Minister will be for days, perhaps even weeks, and the possibility of a joint Likud-Kadima government, with a rotating prime ministership, should not at all be ruled out.

Lieberman’s already hinted he’ll form a coalition with Netanyahu: “We want a right-wing government. That’s our wish and we don’t hide it.” If so, based on the exit polls, that’ll account for 42 Knesset seats, with just 19 more needed to form a government. Carl at Israel Matzav reports that the smaller Israeli Arab parties won’t join with Livni because of Kadima’s responsibility for the Gaza operation, which may finish them off. Even if Kadima does somehow form a government, given these results they’ll be under intense pressure to govern from the right, which likely means escalation — or confrontation — with Iran. Lieberman, in fact, used to be the minister in Olmert’s government charged with assessing strategic threats from Tehran.

I’m flying somewhat blind here so those with broader knowledge of Israeli politics are encouraged to chime in below. Exit question: Does this explain why Iran’s suddenly eager to talk to Obama? If Israel’s shifting right, the mullahs’ best hope to stave off an attack is to get the U.S. excited enough about diplomacy to bring Netanyahu (or Livni) to heel.

Update: Dan Raviv expects The One to pressure Shimon Peres into giving Livni first crack at forming a government.