USIP’s Lucy Kurtzer-Ellenbogen explains how these developments unfolded, what they could mean for Israelis and Palestinians, and for U.S. policy interests in addressing the Israeli-Palestinian conflict.

Israel seems on the verge of a new government. What happened, and how did they reach this point?

The last two years in Israel have been marked by unprecedented political paralysis. Since April 2019, the country has been through four elections. The previous three rounds ended in no candidate able to convince a majority of the 120-seat Knesset (as the Israeli parliament is known) to follow them into a governing coalition. This last election, held in March 2021, seemed as though it would yield a fifth vote. Having gained the most seats, incumbent Prime Minister Netanyahu had been tasked with forming a coalition but failed to muster the necessary support. In May, that mandate was handed to the runner-up, Lapid.

The potential, new governing coalition brings together parties across a wide-ranging political and ideological spectrum. This includes the conservative Islamic Ra’am party (marking the first time an independent Arab party has joined an Israeli governing coalition), a Jewish-nationalist party and six other parties across the right- and left-wing spectrum of Israeli politics. This seemingly implausible set of partners and its branding as “the change bloc” underscores the extent to which this last election was a vote on personality over politics and policy: a referendum on the continuation of Netanyahu’s leadership of the country.

While in more routine elections, Yair Lapid would be expected to emerge as prime minister under this new coalition, it is the right-wing Naftali Bennett who is set to serve in this role, according to a rotation agreement between the two leaders. While Bennett’s Yamina party received 10 fewer parliamentary seats than Lapid’s party in the March election, he was able to leverage his meager seven seats to become the sought-after kingmaker by both Netanyahu and Lapid as they endeavored to construct a coalition. This enabled Bennett to exact the steep price of going first in a premiership rotation with Lapid, each theoretically serving as prime minister for two years, with the other in the simultaneous role of alternate prime minister and foreign minister.

While the narrow margin and diverse composition of this nascent coalition raises questions about its staying power through August 2023, there remains yet one hurdle to overcome before that question becomes relevant. The agreement still requires approval by the Knesset, a process that could take over a week should the current Knesset speaker, from Netanyahu’s Likud party, choose to delay it as long as parliamentary procedure allows. This could allow time for Netanyahu to exploit perceived weaknesses in the coalition agreement, identify possible defectors from the three right-wing parties in the coalition and scuttle the governing bloc-in-waiting. Netanyahu has more than his political future on the line. Currently on trial for multiple counts of abuses of power, his focus on holding onto office cannot be separated from his interest in a path to potential immunity. Notwithstanding, the agreement announced by Lapid at the 11th hour marked a turning point and chink in the armor of a sitting prime minister whose politics and personality, after 15 cumulative years at the helm of Israel’s government, had come to define the country. 

What does this mean for the Israeli-Palestinian conflict?

Naftali Bennett is a solidly right-wing politician in a country where right and left is typically a proxy designation for one’s harder- versus softer-line positioning on compromise toward a Palestinian state. A former senior aide to Netanyahu, he is on the record as being firmly opposed to a two-state solution and a proponent instead of what he once termed “Palestinian autonomy on steroids.” When former U.S. President Donald Trump put forward a plan to address the Israeli-Palestinian conflict, offering a vision widely viewed as tilted heavily in Israel’s favor, Bennett vociferously objected to the proposal on the grounds that it amounted to a state for the Palestinians. He called instead for immediate annexation of all Israeli settlements.

Squaring this outlook with his coalition partners, to include the left-wing Meretz party that includes the two-state solution as part of its platform, could be a formula for cycles of paralysis and ongoing friction when it comes to addressing the conflict and ongoing occupation. Nitzan Horowitz, the chair of Meretz, agreed with Bennett when it came to opposing the Trump plan in 2020, but on the opposite grounds that the provisional map led to nothing resembling a state but instead amounted to “an apartheid map.”  Lapid, who will initially serve as foreign minister, has consistently stated support for a two-state solution, as has Merav Michaeli, the head of Labor — another party to the coalition agreement that had previously dominated Israeli politics for decades and largely supported the peace process. Ra’am party leader Mansour Abbas was one of only 13 Knesset members to vote against Israel’s normalization deal with the UAE, on the grounds that the Abraham Accords were a replacement for the principle of “land for peace” and could undermine prospects for reaching a two-state solution.

In an effort to square this circle, and in a nod to the constituent parties’ shared primary goal of replacing Netanyahu and what they considered to be the divisiveness that marked his tenure, the coalition can be expected to focus on issues that are more likely to unite the country, to include passage of a national budget and focus on the social and economic ramifications of the pandemic. The unprecedented inclusion of the Islamic Ra’am party in the coalition also portends significant investment in the country’s Arab communities, which represent over 20 percent of Israel’s citizenry. Such investment in the “Arab sector” has been championed by Naftali Bennett since he served as minister of economy in 2014.

Therefore, to the extent each party retains an interest in keeping the coalition together, Bennett is unlikely to pursue his annexationist goals, but likewise the more left-leaning parties will be unlikely to push hard to renew an active two-state “peace process” agenda. Even if they seek to sidestep exposing their deepest divisions, the conflict often refuses to be ignored, as recent weeks have once again demonstrated. The inevitable issues that will emerge in relation to the conflict will surely test the vulnerabilities of this disparate coalition, and would-be spoilers may be looking for opportunities to exploit these divisions.

What may be some of the implications for U.S. engagement?

Bennett’s outlook on such issues as the Israeli-Palestinian conflict and U.S. efforts to reenter the Iran deal conflicts strongly with the view of the Biden administration. However, to the extent he is focused on keeping a potentially fractious coalition intact and avoiding the fraught tenor that defined U.S.-Israel relations under Netanyahu and the last U.S. Democratic administration, we are likely to see an initial semblance of calm and non-confrontation on the U.S.-Israel relationship front. Lapid is slated to serve as the country’s foreign minister and has made it clear that he is committed to restoring his country to its more balanced position of bipartisan support and engagement in Washington following Netanyahu’s more exclusive courting of and singular alignment with the Republican party. But as criticism of Israel — particularly of its treatment toward Palestinians — has grown even among traditionally strong supporters, efforts to strengthen a bipartisan relationship will require careful attention by the new Israeli government.

Bottom line, a studied focus by the new Israeli coalition on unifying domestic priorities and nurturing the relationship with Washington could provide some welcome news and breathing room for a U.S. administration that came into office less than eager to prioritize or get distracted by the Israeli-Palestinian conflict. But with the latest Israel-Hamas war barely in the rearview mirror, a cease-fire the parties and the international community will need to work hard to preserve, the urgent questions of Gaza reconstruction looming, and pending court decisions on potential evictions of Palestinian families in East Jerusalem, there will be no shortage of opportunities to assess how this change in the Israeli political arena impacts U.S. engagement and decision-making.