As the two leading candidates in Israel's election continued to claim victory, many Europeans expressed fear Wednesday that the shaky peace process was the real loser in the nearly deadlocked vote.

With an ultranationalist in the role of kingmaker, many were predicting that the hawkish Likud leader Benjamin Netanyahu would eventually prevail over the moderate Foreign Minister Tzipi Livni - hardening the government's stance in already stalled Israeli-Palestinian negotiations.

The ambiguous election results threaten President Barack Obama's desire to make a peace deal an urgent priority, as signaled by his appointment of veteran negotiator Sen. George Mitchell as special envoy, European politicians and commentators said.

Andrew Gwynne, a Labour Party legislator in Britain who chairs a pro-Israeli group, said he was disappointed by the results, which he said are likely to bring Netanyahu's rightwing Likud Party back to power.

"That seems the most realistic outcome, sadly, although I would like to see a progressive government committed to the peace process," said Gwynne, chairman of Labour Friends of Israel.

In the past, Netanyahu has strongly resisted compromising with the Palestinians.

The rising influence of Avigdor Lieberman, whose ultranationalist party won enough seats to become the third-leading force in Israel's Parliament, also caused alarm. His party pushed Israel's once formidable Labor Party, which has often pursued peace, into fourth place.

"Can you imagine anything further from the proposals of Barack Obama than the xenophobic ideas proposed by Lieberman," asked Italy's left leaning La Repubblica newspaper.

The Swiss daily newspaper Basler Zeitung said the vote showed the majority of Israelis don't believe in peace and that impetus toward a settlement must now come from outside.

Mike Williams, a specialist at the University of London who advised Obama's foreign policy team during the presidential campaign, said the election results pose a challenge to Obama.

"It's not good for the peace process," he said. "Obama wanted to start from day one, now that is going to be problematic."

He said the results also raise the prospect that a hardline Israeli government might launch unilateral action against Iran to curtail the Islamic Republic's nuclear program.

"It ratchets up the pressure on the Obama administration to keep Israel in line over Iran," he said. "The major concern for the U.S. is that Israel will start a military operation it can't finish and Washington would have to mop up afterward. The Israelis don't have the technology to effectively retard the Iranian nuclear program."

In Norway, University of Oslo history professor and author Hilde Henriksen Waage said the vote will likely lead to more Israeli use of military force.

"I think the whole Israeli society has taken a step to the right and a more military direction," she said.

Swedish newspapers agreed that the Israeli vote would probably bring about more problems than solutions, largely because Netanyahu has the best chances to form a government but would have to rely on alliances with far-right parties to do so.

But such a government, where Netanyahu is totally exposed to three or four fanatic extremist parties, and which soon would come on collision course with both the U.S. and the Arab world, is one he wants to avoid, the daily Dagens Nyheter said.

Avi Shlaim, a foreign affairs specialist at Oxford University who frequently criticizes Israel, said it is not inevitable that Netanyahu will emerge atop a new Israeli government - but he said the only way the peace process can move forward now is if the Obama administration pressures Israel.

"The implication of the election for the peace process is more of the same," he said. "Only America can push Israel. Obama is an improvement, an honest broker, but America must go a step forward and push Israel toward a settlement."