What just happened?
First, overall turnout was slightly higher than in 2011. Possibly the longish hiatus between elections prompted more Israelis to cast a participatory vote after a decidedly uneventful and far from mesmerizing campaign. Rather than shifting to a more hard-line right-wing pose (as many had predicted), the country moved away a slight bit from the hard-line pro-settler, pro-muscular security and foreign policy orientations of "fortress Israel."
I've yet to see any turnout numbers by electoral sector, but it looks like the Arab-Israelis voted at a rate close to previous elections, bringing to a halt the long decline that has been noted by poll watchers. In fact - though the numbers aren't yet final - it looks like the 3 so-called "Arab" parties improved their standing, possibly picking up a seat between them.
Second - and here is what I think is the big story - an unprecedented 29 seats went to religious parties (though with a proviso). This is an unheralded new number - the last benchmark was 27 seats set in 1999. Almost a quarter of the Israeli electorate voted for parties that insist they have the interests of the Torah-observant as either their ultimate or central focus. The proviso is that it is hard to pin down precisely what Naftali Bennett's Jewish Home party is all about, and the likelihood that a sizable number of non-religious voters neverthless turned to Bennett's rebranding of what in the end is nothing more than the National Religious Party, version 2.0.
Third - the demise of incumbency. An unprecedented 53 new faces will be sworn into the new Knesset. That means more than a 40% changeover in lawmakers. Many pundits argue that the massive disgruntlement of the general population with the socio/economic condition of the country (remember the tent city protests of 2010?) resulted in the "out with the scoundrels" turnover of legislators.
Fourth - the collapse of Kadima, the vanity party created by Ariel Sharon in 2005, and the wholesale shift of the centrist voter from Kadima to the New Kid on the Block, Yair Lapid. This is being touted as the "big story" of election night. I'll have more on that later.
And finally - elections 2013 was a serious setback for Netanyahu. Bibi will still be selected to form a new government, though as a much weakened leader who in all likelihood will have to bring into his next government the 19 new faces which make up Lapid's Yesh Atid party (though at least 2 are seasoned security veterans). A domestically weakened Bibi, forced to turn to his left, will take an Iran attack off the table.
Until the next election...which will come much sooner than 2017.
Here is a not particularly outlandish prediction for the coming month of coalition negotiations: watch for at least one "rotten deal" - some improbably underhanded alliance between sworn political enemies - to be floated, or consummated.