8 days to the elections, and two ego-driven Prime Ministers are battling for public credit in a battle that probably matters, if at all, to only one of them. Sadly enough, despite the relevant and important content of this contest, it will most likely have little effect on the outcome of the actual elections.
Two different policies, and indeed ideological outlooks, stand behind each contestant.
Netanyahu believes that the most important issue on Israel’s table are the Iranian nuclear aspirations. The Palestinian issue is of lesser importance, and is in any case not relevant so long as the Palestinians do not show an inclination to accept the pre-conditions he defined for negotiating his idea of the two-state solution (a diluted version compared to the widely-held concept of any future solution). This policy calls for a concentration of diplomatic and military efforts against this one threat, economic considerations aside, and without much room for any other major political initiatives.
Olmert reads the situation the other way around. While the Iranian issue is of course crucial, Israel’s efforts need to be aimed first and foremost at reaching a resolution of the conflict with the Palestinians. A peace deal is possible with the Palestinian Authority and Abu Mazen can be considered a partner for a future deal (while Olmert was Prime Minister, he reportedly negotiated a two-state deal with the Palestinian that was eventually turned down by the Palestinians correctly predicting his political demise). The immense amount of resources spent over the last few years over “adventurous delusions that were not, and will never be, acted upon” are a waste of crucial national resources.
The irony of course is that they are both right, and a combined policy could tackle both these issues. 
Pursuing a peace deal with the Palestinians, or at least making a sincere effort to do so, would have the benefit of putting a lid not only on the current disquiet in the West Bank, but also on international peace initiatives with huge potential for political damage for Israel (e.g., European initiative).
In addition, and more importantly, a more moderate policy towards the Palestinians would begin building the bridges with the Obama administration that Netanyahu so masterfully destroyed during the last two years or so. Because, while Israeli officials attempt to present an “all is as was” face, claiming that cooperation with Washington has never been stronger, a large amount of distrust now exists in the relationship between these the two staunch allies. Such distrust is hardly constructive as the security establishments on both sides attempt to tackle the Iranian issue. Adding Chuck Hagel into the picture, the only chance that Israel has of convincing the Americans to do the job (an ideal outcome in light of the fact that an Israeli operation will most likely not be as effective), is if the current policy of buying submarines and F-35 fighter-jets while sidetracking the Palestinians and spurning the international community is turned on its head. 


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