In a week when the dead number 60,000 in Syria – a figure considered an underestimate by the UN body that produced it – it can seem like displacement activity to speak of any other topic in the region. It is Syria, surely, that matters most, a slaughter whose scale shames a world that does so little to stop it.

And yet there are other conflicts in the Middle East that cannot be ignored. Not one of the Arab-Israeli wars of 1948, 1956, 1967, 1973 or 1982 left a death toll of even half the current Syrian number, but Israel-Palestine still matters – to Israelis and Palestinians most of all, but also to the many millions around the world who feel bound up in their fate.

For now the focus is on the Israeli elections of 22 January. The polls suggest that a government ranked as one of the most rightwing in Israel's history is set to be replaced by one even further to the right. Binyamin Netanyahu's Likud – now merged with the party headed by his ultra-nationalist former foreign minister, Avigdor Lieberman – is losing ground to the ultra-ultra-nationalist Jewish Home party. Even the more modest projections suggest Jewish Home will emerge as the third-largest party, one that Netanyahu will find very hard to exclude from his next coalition.

And what kind of outfit is Jewish Home? Take a look at its leader, Naftali Bennett, born of American parents and a champion of the West Bank settlers. He demands immediate annexation by Israel of 60% of the West Bank. In a 2010 TV debate he dismissed a Palestinian member of the Knesset in these terms: "When you were still climbing trees, we had a Jewish state here… We were here long before you."

Even if Bennett is kept out of coalition, Netanyahu will still head a more rightist government. The Likud's few remaining moderates were purged in recent internal elections, replaced by hardliners such as Moshe Feiglin. Here's what he told a reporter from the New Yorker: "You can't teach a monkey to speak and you can't teach an Arab to be democratic. You're dealing with a culture of thieves and robbers … The Arab destroys everything he touches." Not for nothing was Feiglin banned from entry to the UK in 2008.

Yet far from being ostracised, such overt racists are set to gain new seats at Israel's ruling table. The centre of gravity is about to shift so far rightward that Netanyahu and even Lieberman will look moderate by comparison. Why is this happening? The conventional explanation for recent rightwing electoral success has been a loss of faith by the Israeli public in the peace platform that once defined the left. The failure of the Camp David talks of 2000 and the response to the 2005 Israeli withdrawal from Gaza – a steady stream of Hamas rockets aimed at Israeli towns – discredited the very idea of land for peace. "We give them land, they give us war," was the bitter Israeli joke and the public resolved long ago that it won't be fooled again.

But that explanation does not fully account for the current lurch to what was once deemed the lunatic fringe. Instead, the blame can be shared evenly between the Israeli centre-left, Palestinian leaders and the international community. Ever since Yitzhak Rabin was murdered nearly 20 years ago, Israel's centre-left has failed to advance a vision of a modern, democratic country – one that would properly acknowledge and integrate those Palestinians living within the pre-1967 borders and no longer run the lives of those Palestinians living outside them, in the occupied territories. The Israeli Labour party typifies the problem, currently led by someone who prefers not to discuss the Palestinian question at all, focusing on "domestic issues." The centre-left created a vacuum and the nationalist right filled it.

As for the Palestinians, Daniel Levy, director for Middle East and North Africa at the European Council on Foreign Relations, suggests they have failed to play an ANC-style role, one that would "challenge the mainstream Israeli discourse". President Mahmoud Abbas makes threats of diminishing credibility – to dismantle the Palestinian Authority, for example – while Hamas's militancy succeeds only in closing Israeli ranks (even if its military wing has just taken the intriguing step of tweeting in Hebrew). Neither approach makes the Israeli public pause and think again. Meanwhile, the international community, administering only the rarest slap on the wrist, has made the status quo cost-free. Israeli voters can put Bennett or Feiglin into government without fearing any consequence. It's 20 years since the US last imposed any real price on settlement activity, with Bush the elder's threat to withdraw loan guarantees – a threat, incidentally, which prompted the Israeli electorate to eject the Likud and install Rabin as PM.

So we ought to brace ourselves for an ultra-right government, one divided between those pushing for immediate annexation and those who seek a less overt entrenchment of the status quo. The already moribund two-state solution will be all but buried.

But it's a new year and we can't afford to be downcast. There are two shafts of light to be spotted in this gloom. First, Levy welcomes what he believes will be a clarifying kind of polarisation: "The layers of camouflage will now be removed." The right will be exposed, the moderate fig-leaves of the past stripped away. Meanwhile, the centre-left will include a greater number of robust liberals and genuine democrats, the ex-Likudniks of the now-defunct Kadima party having mostly departed. Instead of clustering around an artificial middle ground, Israeli politics will present a clear left-right choice.

Second is the impact of all this on the Jewish diaspora, especially in the US. The American Jewish attachment to Israel is profound, but US Jews also tend to be liberal with a strong sense of social justice. They will find Feiglin and Bennett hard to stomach. The Haaretz blogger who asked, "Will 2013 be the year American Jews secede from Israel?" may have got ahead of himself. Diaspora Jews will not break from Israel, but they will surely recoil from this one, albeit dominant, Israeli political camp. Feiglin's Israel is not the Israel their parents taught them to love.

A shift is already visible, with pro-Israel columnists Tom Friedman and Jeffrey Goldberg both calling on President Obama to go ahead and nominate Chuck Hagel – the former senator unafraid to criticise Israel – as defence secretary, arguing that it's time Washington told Jerusalem a few home truths.

That Haaretz writer rightly declared that "American support, anchored by US Jewry, is the strategic asset which makes all other strategic assets possible". But that support has chiefly been for the ideal of a democratic, peace-seeking Israel. If Israelis vote for those who display contempt for both peace and democracy, for those set on the path of Israeli self-destruction, they will one day find that essential bedrock of support cracking beneath their feet.

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