Addendum from "Foreign Policy site"
Here’s how Israeli elections work: Israelis vote for parties, not individuals, in one national district. Each party puts forward a list of candidates, in rank order, and each voter chooses one list at the polls. The 120 seats of the Knesset are then divided among the lists in proportion to the national vote share each party receives, provided the party passes a minimum threshold (now equal to four seats).
The result is a highly representative, but highly fractured political system. At least 10 factions will serve in the incoming 20th Knesset, representing a wide range of ideological positions and demographic constituencies. In this system, minorities of all kinds — including Israel’s large Arab minority — are represented in Parliament, but no single party has ever succeeded in garnering more than half the seats. Consequently, coalitions must be formed, and meticulously maintained, in order to govern; early elections, usually the outcome of a failed coalition, are the norm rather than the exception.