Livni's inability to form the coalition now threatens the peace process even more. At present, polls are forecasting an election victory not for Livni but for “Likud” party boss Benjamin Netanyahu. One doesn't need to reread the history books to know that during Netanyahu's last term of office from 1996 to 1999, the Oslo agreement received its mortal blow.
A real worst-case scenario: Netanyahu wins in Israel, and McCain "wins" (read: steals) the election in the US.
If you've loved Bush's wars without end, you're really going to love what McCain and Netanyahu will most probably do.