Israel is a parliamentray democracy; our president has but ceremonial role, and the prime minister (and his government) is the one who actually makes all important decisions. After elections, each party recommends to the president a candidate for prime minister, and the person who got most recommendations is asked to form a government. To this end, he/she should form a coalition with at least 61 parliament members out of the total of 120.
In the last elections, taking place on 22-January-2013, results where as follows:
Likkud (secular right), the party of the last prime minister Benyamin Netanyahu, got 31 out of 120 parliament members.
Two ultra orthodox parties, which were part of the last government, got together 18 seats.
An orthodox right party got 12 seats.
Three secular centrist parties got 19 + 7 + 2 = 28 seats.
Five secular left parties got together 32 seats.
The last prime minister, Benyamin Netanyahu, was recommended by most of the parties to be the new prime minister as well, and so was asked to form a coalition. The five left parties cannot be part of a coalition because they share an opposite point of view than that of Netanyahu. Still, Netanyahu has several possible coalitions, and his most preferred coalition was with the two ultra orthodox parties and the secular centrist party. As coalitional game theory (and past experience) tells us, he should retain most of the power. Unfortunately for him, the largest secular centrist party and the orthodox right party realized this, and they formed an alliance: either both are part of the coalition, or both are out of it (and they want to ultra orthodox parties out of the government). Since together they have 31 seats, and the five left parties that will anyway be out of the coalition have 32 seats, this means that they became a veto player. Thus, even though Netanyahu is supposed to be the prime minister, these two parties will determine the shape of the coalition.

The coalition is yet to be formed (it took Netanyahu 28 days to realize that the alliance between the two parties is for real and unbreakable), and of course it is yet to be seen how the next government will function. Yet the power of coalitions in coalitional games, and the motivation of various amalgamation axioms, is demonstrated nicely by the current negotiations.