JERUSALEM, Jan. 5 (JTA) — In the wake of the Knesset’s final approval this week of a bill to dissolve itself and call for new elections in May, many political observers here are predicting a chaotic and fragmented new legislature reminiscent of Italy in its worst postwar instability. Some observers are warning, too, that the fluidity and uncertainty affecting many aspects of the Israeli political system could threaten the very foundations of democracy in the Jewish state. They say that the rules of the game have become unsettled — a marked change after Israel’s formative decades of dependable and disciplined parliamentary politics. The likelihood of greater fragmentation of the political map as a result of the forthcoming election stems from the relatively new electoral system, which was first used in the 1996 vote. When elections are held May 17, Israeli voters will again have two ballots to cast: one for a prime ministerial candidate and the other for the party of their choice. If no prime ministerial candidate receives more than 50 percent of the vote, a likely possibility, a runoff will be held June 1. If indeed a runoff is held, it will be the first time in Israel’s history. The conventional wisdom in the political community is that the fragmentation that was exacerbated by the two-vote system in 1996 will be even more sharply felt this time, when even more voters will understand — and implement — their ability to split their vote. The probable outcome, according to these pundits, is that the two major parties, Labor and Likud, will see their strength in the Knesset further eroded, while middle-size parties — such as Shas, Meretz, the National Religious Party and a new, as-yet unnamed centrist party — will emerge even stronger on May 17. Under this scenario, supporters of Labor leader Ehud Barak or Benjamin Netanyahu, the likely Likud prime ministerial candidate, will vote for a party other than Labor or Likud with their second ballot, the vote for the Knesset. The upshot will be that neither Labor nor Likud will have a sizable Knesset representation. If Barak or Netanyahu wins the race for prime minister, he will find it more difficult than ever to put together a coalition, and keep it together if he succeeds in forming it. In addition to the expected weakening of the large parties and growth of the middle-sized parties, the next Knesset is likely to see a plethora of small parties. The same vote-splitting rationale works in favor of the small parties, and all last-minute efforts to raise the minimum number of votes needed to enter the Knesset seem to be failing. Set by law, this threshold is presently 1.5 percent of the votes cast, which effectively means two Knesset seats. Meir Sheetrit, the Likud whip, attempted this week to get it raised to 5 percent, but his proposal was peremptorily dismissed by both the government and opposition. Even a trial balloon floated by Netanyahu himself, calling for a 2 percent threshold, was shot down by Labor — and, not surprisingly, by an instant and vociferous chorus of the small and tiny factions currently represented in the Knesset. Barak indicated that he favors raising the threshold in principle but is committed to his party’s parliamentary allies to oppose it in practice. Had the present Knesset run its full term, legislation upping the threshold may have succeeded in making its way into law. But in the present, pre-election climate, further tinkering with the recently reformed electoral system is considered unseemly and impolitic. This is the reason why an 11th-hour effort spearheaded by Shimon Peres and Yitzhak Shamir to cancel the electoral reforms and return to the pre-1996 system seems doomed to failure. The two former prime ministers, along with former Defense Minister Moshe Arens, held a news conference last week to urge the political community to go back to the one-vote system now, before the Knesset adjourns in March. They also urged that the coming elections be held under the old system. The outgoing Knesset recently passed the first of three votes on a bill abolishing the electoral reforms. But the proponents of the bill, Yossi Beilin of Labor and Uzi Landau of Likud, said it was not intended to go into effect for the upcoming election. Shamir and Peres warn, though, that if the present Knesset does not act at once, passing all three votes on the bill, the new Knesset, full of medium and small parties, will surely bury it — and the present two-vote system will continue indefinitely. Along with this present situation on the parliamentary plane, there is uncertainty over the rules of the game within the various parties as they prepare for the election. Many of the parties are in a state of crisis as key figures secede, regroup, loudly publish their disgruntlement and cast open aspersions on their party leaders. In Labor, Barak is trying to engineer matters so that the party forgoes holding primaries to elect its slate of candidates for the Knesset. Instead, he wants the would-be Knesset members selected by the more manageable party convention. Haim Ramon, a former minister and leader of the Histadrut labor federation and an important figure in Labor, has said he will bolt from the party unless there are primaries. Other Labor legislators are loudly grumbling at what they see as Barak’s high-handedness. In Likud, Netanyahu successfully managed a year ago to abolish his party’s primaries. The Likud Central Committee, where the selection process will take place, is heavily laced with Netanyahu loyalists. But, with two former Likud ministers, Ze’ev “Benny” Begin and Dan Meridor, already having seceded and others publicly contemplating leaving, the mood of the large-size committee may not be predictable. At any rate, forgoing primaries in both of the major parties is a step back from the grass-roots democracy that both proudly proclaimed at the beginning of this decade. In the new centrist party, allies of Meridor are battling daily with supporters of Amnon Lipkin-Shahak, the former army chief of staff over who ultimately will be the centrists’ candidate for prime minister. The two issued a statement Tuesday announcing their intention to cooperate regardless of which of them will head the party ticket. But the jockeying for position continues. Meanwhile, party members have been lobbying Defense Minister Yitzhak Mordechai to defect from Likud and join their cause. In this party, if indeed it takes shape as a single grouping, there is no agreed- upon process for the selection of the rank-and-file list of Knesset candidates. Here again, there is a situation in which the rules and conventions that evolved in the past — and which were intended to entrench participatory democracy — do not apply.