Elections for the eleventh Israeli Knesset were held on July 23. Voter turnout was 78.8%. The Labor Alignment Party received forty-four seats and the Likud Party received forty-one seats in the 120-member Knesset. Thus, there was no clear preference for either the Labor Alignment, which was led by Shimon Peres, or the Likud, which was led by Yitzhak Shamir. Smaller parties then had the power to determine if Labor Alignment or Likud would prevail by forming a coalition with one of them. Instead, Labor and Likud formed a coalition unity government rather than relying on smaller parties. The leader of the Labor Alignment, Shimon Peres, served as prime minister for the first two years, and Yitzhak Shamir, the Likud leader, served as prime minister for the last two years of the Knesset term.
Several notable findings emerged from the election results. Israelis indicated that they were moving to the center of the political spectrum on economic issues and on negotiations with the Arabs; voters showed a declining interest in the socialist ideology upon which the state had been founded; and Israelis were increasingly less willing to return to the pre-June 1967 borders and wanted to retain some control over and presence in the West Bank, Gaza, and the Golan Heights.
Election results also showed a deepening of political polarization along ethnic lines. Most Ashkenazi Jews (Jews originally from Europe) voted for Labor, and most Mizrachi Jews (Jews originally from Middle Eastern lands) voted for Likkud. Specifically, 60% of Ashkenazim voted for Labor party candidates, and 34% voted for Likud. Amongst Mizrachim, 73% voted for Likud and 21.5% voted for Labor. Of those Mizrachim who voted for religious party candidates, many repudiated the Ashkenazi-dominated religious parties by throwing their support to the new Shas and Tami parties representing the Mizrachi Orthodox. Shas and Tami received 9.5% of the total Mizrachi vote, and won five Knesset seats.