"What is noted less often, however, is that left-wing parties have also gained," Singh said.

Arab parties are perpetual bridesmaids in new governments

Then there are Israeli Arab/Palestinian parties, long a presence in the Knesset but never included in a government coalition.

But they and their constituents are politically diverse and continue to play a role in Israeli politics, said George Jakaman, a political analyst at Bir Zeit University in the West Bank.

At the same time, he said, there is a common denominator, -- the fight against inequality and economic and social discrimination.

Hanin Zoabi -- the first Palestinian woman to get a seat in the Knesset and running again -- laid out the uncomfortable reality.

"Israel considers itself to be a Jewish state, not a state for all its citizens and in Israel it is part of the logic of the system to give privileges to the Jews at the expense of the Arabs, either in land, land confiscation, budget, health care, economic rights even the recognition of my identity," she told CNN.

"Israel does not recognize me as Palestinian. Israel wants me to be Arab Israeli, something which we don't understand."

Jakaman said Netanyahu's return to power is expected, and that does not bode well for the resumption of the moribund Israeli-Palestinian negotiations. Netanyahu has been more focused on Iran, not the resumption of settlements, he said.

"If he accepts the conditions of the former foreign minister of Israel, Livni, as a condition of joining a coalition," he might be more willing to pursue talks.

"If he accepts this, there's a chance his coalition government will not be completely right-wing," Jakaman said.

What would new government mean for U.S.-Israeli relations?

Iran's nuclear aspirations haven't always been front and center throughout the campaign.

"This campaign has been more of a personality competition rather a debate over the strategic issues facing Israel," Malka said. "So Iran has surprisingly played a minor role."

But Netanyahu is quoted as telling U.S. senators that "my priority, if I'm elected for a next term as prime minister, will be first to stop Iran from getting nuclear weapons."

Both Israel and the United States have long been concerned over the danger of Iran having the capability of building a nuclear weapon.

U.S. President Barack Obama and Netanyahu have differed on how to approach this and the settlement issue. They will have to deal with one another, despite reported friction. But this time there will be new players.

Makovsky said that the "most important outcome of Israel's electoral maneuvering" from an American perspective "may be its impact on Netanyahu's top Cabinet ministers."

"Defense Minister Ehud Barak -- Washington's primary interlocutor on Iran and a host of other foreign policy and security issues -- has announced his retirement from Knesset campaigning, though he has not ruled out a return to government if invited," he said.

"Washington is bound to become more concerned about whether Netanyahu will include political opponents in his coalition -- and, if not, whether more 'E-1'-type moves are ahead."

Israelis are concerned about the U.S. national security team.

Former Sen. Chuck Hagel, who has been criticized by some pro-Israel supporters, got the nod from Obama for defense secretary.

Sen. John Kerry, nominated to replace Hillary Clinton as secretary of state, is regarded as a friend of Israel but "also a staunch critic of Israel's settlement policy," Ynetnews.com reported.

He will deal with Israeli issues and other key foreign policy matters as Obama handles a full plate of domestic matters -- such as the debt ceiling and gun control.

Disagreements between the Obama administration and supporters of the West Bank settlements persist.