Kadima's announcement yesterday that they agreed with 90% of Yisrael Beitenu's platform was a big mistake.
On one hand, even after their agreement, there is very little chance that Lieberman will actually recommend Livni to the President to make the government. On the other hand, the Left (Labor and Meretz) are absolutely furious with Kadima and will definitely not recommend Kadima.
It looks like no one (other then Kadima) will recommend Livni to form the next government. Netanyahu on the hand will have (in addition to the Likud) Shas, UTJ, Bayhit Hayehudi, and the Ichud Haleumi, 50 seats. In that situation it is hard to see how Peres can not ask Netanyahu to form the next government.