Following her narrow victory in the Kadima Party primary in Israel on Wednesday, Tzipi Livni has begun talks with the aim of creating a coalition government and becoming the country's second female prime minister after Golda Meir.

If Livni is unable to complete what could be the difficult task of building a government within the next 21 days, then Prime Minister Ehud Olmert -- who is stepping down to battle corruption allegations -- could stay on as a caretaker prime minister until the next election scheduled for 2010. However, it is more likely that parliament would dissolve itself early paving the way for elections in early 2009.

Livni's biggest problem in forming a coalition could be the Shas party, which is demanding greater social spending -- especially on religious schools -- as a condition for staying in the government. Her chief political rival Shaul Mofaz, who said he would take a break from politics after losing the election, had strong ties to the ultra-orthodox party, but Livni does not. She must also heal a rift within Kadima that saw almost half of her party's voters casting ballots for Mofaz.

An outspoken champion of a Middle East peace deal, Livni's election has drawn praise from some leading Palestinians -- and it is also fueling expectations in Europe and the West. However, without a strong coalition or the support of the majority of Israelis, German newspaper commentators warn on Friday that Livni's hands could be tied. Still, many characterize her as someone who is sincerely interested in reaching an agreement with the Palestinians that could bring peace to the region. Nevertheless, most are calling for cautious optimism.

The center-left Süddeutsche Zeitung writes:

"The narrow victory margin of 431 votes in the Kadima leadership election may make it difficult for Livni to form a government. However, in a certain way it could also end up being helpful. The fact that 20,000 Kadima members voted for her and 19,500 voted for Mofaz shows just how split the party is. Mofaz, who made the surprise announcement on the same night that he was to take a break from politics, stood for a conventional Israeli policy of fighting Palestinian terrorism with military means and pushing diplomatic initiatives into second place. Livni, on the other hand, believes in the peace process and has been speaking for 10 months with the Palestinians. In the nuclear dispute with Tehran she is in favor of sanctions while Mofaz would like to bomb Iran's nuclear facilities tomorrow. If Livni wants to follow in the footsteps of Golda Meir and become Israel's second female prime minister, then she faces two tasks: forming a stable coalition government and healing the rift in the Kadima."

"With Mofaz's departure the chances of Livni being able to get the ultra-Orthodox Shas party to join a government have become much slimmer. Mofaz has an excellent relationship with the religious politicians, but Livni does not. … However, Livni's win entails an attractive alternative: saying goodbye to the right. If Shas stays away from Livni's government then she could include the left-wing Meretz party."

"Almost all Israeli governments have long allowed themselves to be blackmailed by the right-wing and religious parties and have caved in to their particular interests in order to keep the peace within the coalition. …Without these rebels in the coalition Livni could push ahead with the peace talks and restore an important currency in Israeli politics that has long been lost to bribery and corruption scandals: credibility."

The left-wing Berliner Zeitung writes:

"The hopes for Livni are enormous. If she were the lead singer of a rock band, one derisive commentator has said, the act would be called 'Tzipi and the Expectations.' Western governments are also resting their hopes on her. In Europe, in particular, she's seen as a guiding light of the current Middle East peace process."

"But a measure of sobriety is needed. Compared to her male competitors, she's certainly a promising politician -- she deeply believes that a two-state solution (to the Palestinian conflict) is in Israel's best interest. Securing Israel's future as both a Jewish and a democratic nation is one reason she entered into politics."

"Yet she simply has no sustainable base for concessions to the Palestinians (in the current peace negotiations). She has a mandate within the Kadima Party, not within the wider Israeli public. She only has a few months to win a wider mandate. If she can't put a new cabinet on its feet, her chances of surviving new elections (in early 2009) against Benjamin Netanyahu will be narrow. At the same time she needs to be careful not to lose her reputation as a clean politician, particularly if she builds a coalition by wooing the ultra-Orthodox Sephardic party, Shas."

The center-right Frankfurter Allgemeine Zeitung writes:

"The fact that the chief Palestinian negotiator, Ahmed Qurei has greeted Israeli Foreign Minister Tzipi Livni's election as head of the Kadima Party is understandable. She's considered more willing to compromise than her only slightly outgunned competitor Shaul Mofaz, who comes from the army, and she awakens hope. … In her, the Palestinians see a politician who is capable of getting in the way of hated Likud leader Benjamin Netanyahu. Livni wants to move forward with the end status talks agreed to at Annapolis last November. At the same time, she built part of her career inside the Mossad, and Israel's security is her foremost concern. One must consider that as much as the formidable strength of political opponents within her own party. One serious attack on the Arab side could dampen any optimism."

The Financial Times Deutschland writes:

"The Kadima was founded to provide a home for every voter for whom the Labor Party is too far to the left and the Likud too far to the right -- and who believe in the necessity of reaching a deal with the Palestinians. If there's anybody who embodies these goals, it's Livni. She is neither a dove nor a hawk, she's a pragmatist with a conservative background. It is also unlikely she would do anything to squander Jewish interests. And that could give her the backing she needs to reach a peace deal with the Palestinians."

"For the party, down-to-earth Livni is the ideal contrast to departing chief Olmert. Whereas Olmert made headlines with his corruption scandals, the former agent created the credible impression that she had national interests in mind rather than her own personal gain. That's why Livni as prime minister could present Israel with the opportunity for a fresh start."

The business daily Handelsblatt writes:

"Livni's first test is domestic: She will have to hold together the current coalition, or build a whole new government. As its price for remaining in the coalition, the ultra-Orthodox Shas Party is demanding more social benefits and a promise not to partition Jerusalem. Livni should not give in on either position -- if only to show who's boss."

"If it comes to new elections, Livni will have one advantage. She's less experienced than her national rivals (Netanyahu and Barak), but she's known as a trustworthy 'clean lady,' who won't be corrupted. Since Israel's political class, Netanyahu and Barak included, has been in the headlines lately for scandal after scandal, Livni will profit from a spotless image."