Kadima, headed by Ehud Olmert, will probably form the next coalition, following its win in yesterday's elections, although it garnered a smaller number of seats than had been predicted over the past weeks.

The Pensioners' list, Gil, was the big surprise of yesterday's elections, according to last night's exit polls, published after the closing of polling stations at 10 P.M. The Pensioners' Party, which did not manage to pass the electoral threshold in the last elections, received eight to 10 seats, depending on the exit poll.

Yisrael Beiteinu, headed by Avigdor Lieberman, also chalked up a major achievement, going from seven seats to an expected 12 to 14; it is now the third largest party.

The Likud was apparently shunted into fourth place with 11 to 12 seats predicted by the exit polls.

Kadima is expected to receive between 29 to 32 seats, down from the 36 to 38 predicted by opinion polls over the past weeks.

The exit polls gave Labor between 20 and 22 seats, slightly better than the polls before the elections. The gap between Labor and Kadima will dictate to a great extent the nature of coalition negotiations, and it was predicted differently by the various TV exit polls. Channel 1 projected the smallest gap - seven seats, while Channel 10 forecast the largest - 11 seats.

Meretz is expected to enter the 17th Knesset with five seats, one less than in the 16th Knesset, while Shas seems to be keeping its number steady at 10 to 11. United Torah Judaism, with five or six seats, may have one more MK in the 17th Knesset. The United Arab List-Ta'al received three to four seats; Hadash, two to three, while Balad is teetering on the brink of the threshold of a seat.

The distribution of seats according to the exit polls show that the National Union-National Religious Party's eight to nine seats will not allow it to form an obstructing bloc even if it were joined by the Likud, Yisrael Beiteinu and the ultra-Orthodox parties.

Acting Prime Minister Ehud Olmert said last night that the public had said yes to the convergence plan he presented three weeks ago in the media. He also reiterated that if Israel were not able to negotiate with the Palestinians, it would take its fate into its own hands and act unilaterally.

Labor chairman Amir Peretz said yesterday in private conversation that ...

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By Gideon Alon, Yuval Yoaz and Yossi Verter