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The direct election of Israel's prime minister, an electoral reform first put into effect in May 1996, constituted a watershed in Israel's political life. Previously, the prime minister normally came from the party with a plurality, now it went to the candidate with the largest number of votes. This made all the difference in 1996: under the old system, Shimon Peres would most probably have retained the premiership (Labor won 34 seats compared with Likud's 32; the left-wing bloc had 52 seats vs. 43 for the right). In other words, the new electoral system brought Binyamin Netanyahu, who won the contest with Peres by the slimmest of margins (50.4 per cent to 49.5 per cent) to power despite his party's defeat. The reform had other implications, quite contrary to its intent, including a substantial increase in representation of small parties (people voted for their preferred candidate for the premiership but not for his party, instead casting their second ballot for a sectarian party closer to their heart).

This double blow to Labor built on a long incremental process, during which it found itself locked in a struggle for political dominance with Likud—a struggle that Lochery narrates in detail. He finds that Labor declined from being a dominant party with power (during 1948-77) to a dominant party without power (1977-91), to a non-dominant party with power (1992-96). Presumably he finds Labor since 1996 a non-dominant party without power, but such a definition fails to recognize that Israeli voters seem to be recoiling equally from both large parties, instead shifting their attention to more immediate cultural, ethnic, and socioeconomic issues. This was vividly illustrated by the results of the 1999 elections, which brought Labor and Likud to the lowest ebb in their history, effectively creating a multipolar domestic political system in Israel. Hence, if the Knesset will fail to reintroduce the pre-1996 electoral system during its present term, Lochery might consider a new study titled "Labor and Likud in the Shadow of Shas."