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Israeli Prime Minister Ariel Sharon has announced the formation of a new government. The new 68-member coalition promises to be unwieldy: It is composed of Likud and three smaller parties that have little in common. While the new government can muster a majority in Parliament, it is unlikely to be able to make difficult decisions. That means a continuation of the status quo is the most likely course. That is good for Mr. Sharon and good for the settlers, but it offers no hope for progress in the violent Israeli-Palestinian confrontation.

Mr. Sharon’s Likud Party won a historic 40 seats in the January elections. He has joined with the Shinui Party, a secular party that won 15 seats, the National Religious Party, a pro-settlement group that claimed six, and the National Union Party, a rightwing party with seven seats. While the coalition gives the government a comfortable majority in Israel’s bitterly divided Parliament, fault lines are quickly evident. While there are shared suspicions of Palestinian leader Yasser Arafat, there is no consensus on the future of a Palestinian state. The NRP and NUP are opposed to any state. Shinui has said that it favors statehood, although it concedes that the time may not be right for serious negotiations. Mr. Sharon has said that he is ready to make “painful decisions,” but his actions have fueled suspicions that he is hostile to the creation of any real Palestinian authority and is trying to create a fait accompli that would leave any eventual Palestinian state at the mercy of Israel.

Settlements are the other real problem. Shinui favors dismantling some of the outposts in preparation for a deal with the Palestinians. Shinui leader Yosef “Tommy” Lapid said Mr. Sharon promised that there would be no expansion of settlements. The leader of the NRP, Mr. Effie Eitam, denied this, claiming that the coalition policy guidelines “will include absolutely no reference to removing or freezing settlements” and that natural growth is to be expected. Mr. Sharon has been a supporter of settlements, and his party has generally supported them, although it is also divided. Past precedent suggests that Mr. Lapid will find himself isolated and marginalized on this pivotal issue.

Even without explicit support for expansion, the balance of forces within the government will prevent Israel from shifting its present policy. This means no attempt to compromise with the Palestinians — and that means that the peace process is dead for now. Any deal with the Palestinians — no matter who is in charge — will eventually have to address the statehood question, and stop building and dismantle some of the existing settlements. This Cabinet is not going to do that.

The question is whether any Israeli government would — or could. A grand coalition would provide the political cover and support for bold decisions that could lay the foundation for peace. This time, however, Labor, Israel’s second-largest party, has not joined the government. Labor Party leader Amram Mitzna, who campaigned against Mr. Sharon on a platform that called for the dismantling of Jewish settlements and reopening peace talks with the Palestinians, said he would not join Mr. Sharon’s coalition unless the prime minister was determined to make peace with the Palestinians. Mr. Mitzna met with his rival several times, but ultimately decided to hold out, apparently unconvinced of Mr. Sharon’s intentions. His skepticism is born of experience: Labor has joined in previous grand coalition governments, but there has been no slowdown in the expansion of settlements.

Mr. Sharon has always cast himself as a peacemaker, a warrior whose past would give him credibility and protect his right flank after making a deal. The problem with this image is that Mr. Sharon has always talked tough and shown no willingness to really negotiate with the Palestinians. A “Nixon-like” bold stroke has always been pushed back to the future, and the settlements have been expanded. In short, the prime minister’s credibility has dwindled, if not vanished altogether.

Fortunately for Mr. Sharon and his coalition partners, that is not a key issue now. Instead, the prospect of war with Iraq is shaping all political calculations in Tel Aviv. There is speculation that Mr. Sharon will use an Iraq conflict as an excuse to eliminate Mr. Arafat — politically, not physically — and Palestinian dreams of statehood for good. Celebrations in the Palestinian territories or attempts to bring the war to Israeli soil will give the prime minister the excuse he needs. Washington’s bold plan to “redraw” the map of the Middle East and promote democracy throughout the region gives Mr. Sharon and his allies yet another reason to hold out. It is unlikely that the Palestinians are going to be as patient as the Israelis.

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