Israeli Defense Minister Resigns, Threatening Government’s Survival

(Bloomberg) -- Israel’s defense minister resigned and pulled his faction out of the government Wednesday, leaving Prime Minister Benjamin Netanyahu’s coalition with a precarious parliamentary majority and threatening its survival. Markets fell.

Avigdor Liberman, who has urged the government to strike a harsh blow against Gaza’s Hamas rulers, quit after the security cabinet on Tuesday agreed to a truce halting a two-day flareup in fighting. He also called for early elections.

Israeli Defense Minister Resigns, Threatening Government’s Survival

The cease-fire, and attempts to reach a long-term truce, are “a capitulation to terrorism,” Liberman said at a news conference. “There’s no other way to look at it.” He also faulted Netanyahu’s decision to let Qatar transfer $15 million to Gaza to ease the dire humanitarian situation there, saying the money would support families of militants who attacked Israel.

The departure of Liberman’s Yisrael Beitenu party from the coalition leaves Netanyahu with the narrowest possible majority, 61 of 120 parliamentary seats. The eight-seat Jewish Home party threatened to pull out, too, unless its chairman Naftali Bennett -- a Netanyahu rival who’s also accused the government of being soft on Gaza -- gets the defense portfolio.

Double Duty

A spokesman for Netanyahu’s Likud party, Yonatan Ulrich, said the prime minister plans to take over the defense portfolio for the immediate future.

Israeli Defense Minister Resigns, Threatening Government’s Survival

photoNetanyahu governed with a 61-seat coalition before Liberman joined in May 2016. Still, while smaller governments usually last longer than larger ones, the prime minister faces a “special situation,” with Bennett insisting on the Defense Ministry and Likud rebels breaking party discipline on parliamentary votes, said Abraham Diskin, professor emeritus of political science at the Hebrew University of Jerusalem.

Israeli Defense Minister Resigns, Threatening Government’s Survival

“I would say the scenario of early elections is closer than ever before,” Diskin said. “We could have early elections in a few months, maybe February.” Elections are currently scheduled for November 2019. He predicted the next vote would produce a similar breakdown along the right-left divide.

Stabilization Efforts

The government’s collapse over Liberman’s resignation is not a foregone conclusion, however. Netanyahu is a master at political maneuvering, and his Likud party said he had begun consultations with coalition partners to try to shore up the alliance.

“I think Netanyahu will use this crisis to solidify his position,” said Mitchell Barak, a public opinion expert who served as an adviser to Netanyahu in the 1990s.

The public has little tolerance for military fatalities, and recent confrontations with Gaza haven’t caused large-scale casualties or damage, Barak said. “He started this government with 61, he knows what is like to run a coalition of 61, and for those remaining, it is worth it to stabilize and have elections later.”

Effective Friday

Netanyahu had no immediate comment on the political turmoil.

The shekel was down 0.12 percent against the dollar at 6:13 p.m. in Tel Aviv. Israel’s main stock gauge, the TA-35, extended losses to as much as 0.9 percent, the lowest level of Wednesday’s session, before closing down 0.7 percent.

Liberman’s resignation, which is due to take effect on Friday, follows months of speculation about whether the prime minister himself would initiate the government’s collapse and call early elections.

Corruption Probe

A two-year-old corruption probe against Netanyahu is inching toward conclusion, with Attorney General Avihai Mandelblit due to decide whether to indict him in three separate cases. Some commentators have reasoned that if the prime minister goes to early elections and wins big, it would be harder for Mandelblit to take action against him.

Netanyahu has denied any wrongdoing and has contended he’s the victim of a leftist cabal out to bring down his conservative government. Polls have shown he’d win an early election, though he is now facing heavy criticism from some residents of southern Israel, who are furious he agreed to a truce after they were bombarded by Gaza rocket fire this week.

In Gaza, Hamas celebrated Liberman’s decision, and some residents handed out sweets in the streets. “Liberman’s resignation is a recognition of defeat, failure and helplessness in facing the Palestinian resistance,” Hamas spokesman Sami Abu Zuhri said. “Gaza succeeded in touching off a political earthquake in the occupation’s sphere.”

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