In the lowest election turnout in Israeli history, Sharon's Likud party nearly doubled its seats in the Knesset (parliament) to 37 while its traditional rival Labour lost six seats to give it a total of 19 - its worst-ever election defeat. The despair of the left-wing Labour party was compounded by the news that the secular Shinui Party had scored a major success, boosting its parliamentary representation to 15 seats from just six.

The result places Sharon in an awkward position. Joining forces with right-wing and religious parties would enable him to form a government, but such narrow ideological coalitions have a short shelf-life in Israeli politics and would hamper Sharon's ability to make any conciliatory moves towards a settlement with the Palestinians.

Instead, Sharon has said that he would prefer to build a broad-based alliance. Even before the final results were announced, he appealed for reconciliation between the parties, saying that the political differences 'should not become a barrier for national unity'. However, he may find he has his work cut out in wooing the major centrist oppositions parties into his fold.

Conceding defeat shortly after polls closed, Labour leader Amram Mitzna reiterated his earlier pledge that the party would not join a coalition government with Likud, and instead is seeking to lead an opposition bloc with Shinui. The secular party had similarly campaigned on the premise that it would not join a government that includes the ultra-Orthodox factions. Party leader Tommy Lapid did however refine the position on 29 January, saying that Shinui would be prepared to work alongside religious parties in an emergency coalition in the event of a war.

Palestinians fear that Sharon's renewed mandate could herald even worse times ahead in the occupied territories. 'Matters will go from bad to worse,' Palestinian spokesman Saeb Erekat said as the election results flowed in on 28 January. 'Sharon proceeded to reoccupy the West Bank during his first mandate. He will now go on to reoccupy the Gaza Strip during his second.'

Gaza has indeed been the target of recent Israeli attacks. Two days before the election, more than 50 Israeli tanks converged on Gaza City, wreaking massive destruction, killing at least 12 Palestinians and injuring 50 more. Fresh violence in the north and south of the strip following the elections has left at least one Palestinian teenager dead and many others wounded.

Attempts by Palestinian leader Yasser Arafat to restart negotiations with Sharon following the elections were rebuffed immediately by the Israeli premier. Responding to Arafat's 29 January offer for a meeting, Sharon's office said the Palestinian leader 'is not and will never be a negotiating partner. Israel will only negotiate with Palestinians not involved in violence.'