Coalition or New Vote? Israel in Nail-Biter as Deadline Looms

(Bloomberg) -- Israeli Prime Minister Benjamin Netanyahu’s coalition-building crisis intensified hours before a midnight deadline, with the country’s month-old parliament launching a debate on dissolving itself and calling new elections.

The Israeli prime minister, who managed to glide past a tangle of corruption scandals to win a fifth term in April 9 elections, hasn’t been able to resolve an impasse between prospective governing partners on who should serve in the army. If he can’t assemble a majority government by the deadline, he’s likely to advance a bill to dissolve parliament and go to the polls again rather than let a rival have a shot at building a coalition.

“If he can’t form a government, he prefers to go to an election where he might fare better than before than have a situation where he won’t be prime minister,” said Gayil Talshir, a senior political science lecturer at Hebrew University of Jerusalem. “The whole game is to survive as prime minister and to avoid indictment at any cost.”

Barring a last-minute compromise, it would be the first time an Israeli prime minister-designate failed to put together a ruling coalition after an election. Two public opinion polls this week suggested a similar breakdown in Knesset seats if a new vote were held.

Legal Entanglements

A decision to hold new elections would throw Israel’s political system into disarray just as the Trump administration prepares to roll out its Middle East peace plan next month. It also would weaken Netanyahu as he faces possible indictment on bribery and fraud charges.

For the past few weeks, the Israeli leader has been talking with prospective governing allies about legislation that would shield him from possible prosecution while he’s in office. New elections would make it difficult for Netanyahu to push the legislation through before Attorney General Avihai Mandelblit decides whether to indict him.

Last week, Mandelblit postponed until early October a hearing where the prime minister can plead his case to try to avert a trial.

At the heart of the standoff is a longstanding squabble over drafting ultra-Orthodox Jewish men into the army. Former Defense Minister Avigdor Liberman -- an on-again, off-again ally whose secular Yisrael Beitenu party holds five of parliament’s 120 seats -- insists that devout men must serve, as their secular counterparts do. A bloc of ultra-Orthodox parties, which controls eight parliamentary seats, has refused to back down on its demand to exempt the community from Israel’s compulsory draft.

Without Liberman’s support, Netanyahu can’t form a majority government. It was Liberman’s resignation as defense minister in November that set in motion the previous coalition’s collapse. At the time, he said he couldn’t remain in a government he considered too soft on Palestinian militants in the Gaza Strip.

Past negotiations often have taken the full six weeks, and many Israelis initially regarded the deadlock as typical horsetrading. But things turned serious Monday when a proposal to disperse the Knesset passed initial votes in parliament and the prime minister delivered an appeal for compromise on prime-time TV.

“There’s no reason to drag the nation into unnecessary elections,” Netanyahu said. “If there’s a will and readiness, we can resolve everything in two minutes.”

Even U.S. President Donald Trump weighed in on the impasse. “Hoping things will work out with Israel’s coalition formation and Bibi and I can continue to make the alliance between American and Israel stronger than ever,” he wrote on Twitter, referring to Netanyahu by his nickname.

To contact the reporter on this story: Amy Teibel in Jerusalem at ateibel@bloomberg.net

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Michael S. Arnold, Gwen Ackerman

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