• Two rivals claim victory in Israeli elections. (Obama worried about right wing government)

JERUSALEM – Israel’s new coalition government — whether led by hard-line Benjamin Netanyahu or his moderate rival Tzipi Livni — is likely to take a tough line on two burning issues: Hamas and Iran.

As the two began courting potential coalition partners Wednesday, two scenarios took shape: a narrow alliance of hawks who would stall peacemaking with the Palestinians, or a broad power-sharing government that would give Israel a more moderate face and greater international support.

With only a few thousand votes by soldiers still to be counted, Livni’s Kadima Party had one more seat in parliament than Netanyahu’s Likud. But Netanyahu’s natural allies on the right have a clear majority of 65 in the 120-seat parliament, giving him the edge in forming a coalition.

President Shimon Peres will consult all 12 parties in the new parliament next week before choosing either Netanyahu or Livni to try to form a government — a process likely to take weeks if not months.

• House and Senate reach compromise deal on the stimulus bill. Expect final passage this week.

WASHINGTON — Moving with lightning speed, the Democratic-controlled Congress and White House agreed Wednesday on a compromise $790 billion economic stimulus bill designed to create millions of jobs in a nation reeling from recession. President Barack Obama could sign the measure within days.

“More than one-third of this bill is dedicated to providing tax relief for middle-class families, cutting taxes for 95 percent of American workers,” said Senate Majority Leader Harry Reid at a Capitol news conference where he was joined by moderates from both parties whose support is essential for the legislation’s final passage.

• No more off shore drilling.

WASHINGTON — Interior Secretary Ken Salazar has rejected a Bush administration plan to open vast waters off the Pacific and Atlantic coasts to oil and gas drilling, promising “a new way forward” in offshore energy development including new wind projects.

Salazar at a news conference Tuesday criticized “the midnight timetable” for new oil and gas development on the country’s Outer Continental Shelf proposed by the Bush administration four days before President Barack Obama took office Jan. 20.

• Big change in press conference diction between this president and the last. Obama speaks at a 10th grade reading level, Bush at 7th.

• Finally, the homeless woman from Obama’s town hall gets a house.