We'll do this as a Q&A, OK?
The Likud made the biggest gain, obviously, more than doubling its seats in the Knesset. Kadima won the most mandates but lost one from the last parliament, and in a race this close, one seat could mean everything. Avigdor Liberman's Yisrael Beiteinu obviously won also, taking third place.
Small gains were also made the Arab parties, who picked up a seat for a total of 11.
The big losers were Labor (down 6 mandates to 13), Meretz (the Social Democrats, down 2 seats to 3) and, less so, the Haredi (ultra-orthodox) religious parties, Sephardi Shas (down 1 mandate to 11) and Ashkenazi United Torah Judaism (down 1 mandate to 5). The far-right national-religious movement lost 2 seats and now holds 7.
So who won again?
Tzipi Livni of Kadima looks at this point to have won the most mandates, 28 to Binyamin "Bibi" Netanyahu's 27. Livni has already called on Bibi to form a national-unity government, with junior partners to be decided upon later. Bibi, however, is claiming victory while conceding the Likud received fewer votes than Kadima. This claim is based on the idea that the "nationalist camp" received more mandates overall than the "left" did. And this is nominally true: Likud's mandates plus those of Liberman, the national-religious parties, and the two Haredi parties (Shas and United Torah Judaism) come to 65 mandates versus the 55 for the "left."
So Bibi gets to be Prime Minister again?
Not so fast. One thing that has been made abundantly clear is that Liberman, despite his 15 mandates (that's one out of every eight seats), is a very divisive figure. Not only does the left hate him and the Arabs, but the Haredi parties have been particularly hard on him in the lead-up to the election, calling his appearance at the Western Wall the weekend before the election hypocritical, given his party's outspoken desire to secularize Israel.
So it may turn out that Bibi can get either Liberman's mandates or the Haredi mandates, but not both. The Haredi mandates are actually very slightly higher, but without Liberman and without Kadima, Bibi can't form a majority. His tally comes to only 50 mandates, or 11 mandates too few.
So then it's Livni?
Probably. But it will have to be a national-unity government with the Likud. The combined mandates of the two require only another 6 mandates to form a government. Labor offers those with 7 seats of breathing space. Plus, without Liberman on board, United Torah Judaism can join for a total of 73 mandates. (Shas hates Livni and probably wouldn't serve in a government led by her.)
Is it wise to leave Liberman out? It is if the Haredi parties don't like him and they have more seats than he does.
You said the Arabs have 11 seats. What about them?
If Livni tried to form a center-left coalition of Kadima, Labor, and Meretz, that would give her only 44 mandates. All the Arab seats don't put her over the top. Even the Arab votes and United Torah Judaism (who would very well reject the idea of sitting in a coalition with the Arab parties) would give her only 60 mandates.
So the Arabs get left out?
And what's the effect of all this on the peace process?
Livni and Bibi will likely agree to share the prime ministry, with Livni taking it first, followed by Bibi, who in the interim is the likely finance minister. Ehud Barak of Labor will stay on as defense minister and Livni will probably keep the foreign affairs portfolio for herself.
Given that it's the Prime Minister, the defense minister, and the foreign minister that primarily are responsible for negotiations, we're not going to see a big change, particularly because Livni has been Acting Prime Minister for the last several months. Only a change on the Palestinian side can move the peace process forward.
And how likely is that?
Not likely, but the Palestinians had better move, because if a national-unity government is formed and it lasts longer than two years, then Bibi will become Prime Minister and no progress will be made at all.
The ball is now firmly in the Palestinians' court to move the peace process along. With Hamas at the helm, it's a dead issue. Literally.