Canada’s Paul Martin is not the only national leader being forced to an early election. After a meeting yesterday between prime minister Ariel Sharon and new Labour leader Amir Peretz, Israel is set for elections early next year, probably in late February.

The Israeli electoral system (explained here) is an unusually pure form of proportional representation. The whole country, voting as a single electorate, chooses between party lists, and the threshold for representation is only 2% (for most of Israel’s history it was only one per cent). It’s a fine system, but I have to admit that Israel has not been a good advertisement for it: for 30 years it has been plagued by unstable governments, with unwieldy coalitions at the mercy of a multitude of small parties.

The prospects this time are as confused as ever. Peretz, who defeated veteran Shimon Peres for his party’s leadership in an upset result last week, represents a hitherto untested combination of factors. He is at once a strong supporter of negotiated peace with the Palestinians, a trade union leader opposed to free-market policies, and a Sephardic Jew (born in Morocco) able to appeal to Israel’s growing non-Ashkenazi community.

Ariel Sharon, on the other hand, has been largely disowned by his party, the traditionally hawkish (but also free-market leaning) Likud. His withdrawal from the Gaza Strip was opposed by most of his own followers, who have turned instead to former prime minister Benjamin Netanyahu. By the time elections are held, it is possible that Netanyahu will be Likud leader and Sharon will break away to form some new centre grouping.

The overriding importance of war and peace in Israel has deformed the normal left-right political set-up. Labour, despite its social-democratic outlook, has been seen as a party of the elite, while Likud has appealed more to marginalised and immigrant groups. Arabs, secularists, peaceniks and religious extremists also all have their own parties – sometimes several of them – that shift support unpredictably. It’s going to be an interesting poll to watch.