Israel's Netanyahu Retains Grip on Power Despite Graft Probes

(Bloomberg) -- Israel’s Benjamin Netanyahu looks set to sail to a fifth term as prime minister after a bruising election campaign against a popular former military chief, his muscular brand of nationalism and global stature eclipsing doubts about his personal integrity.

Netanyahu’s Likud party and retired general Benny Gantz’s Blue and White bloc each won 35 of parliament’s 120 seats. But together with other right-wing and religious partners, a Netanyahu-led bloc secured 65 seats, according to a tally of 97 percent of votes, Israeli media reported. Shortly after polls closed, several of the prime minister’s current partners announced that they would recommend to President Reuven Rivlin that Netanyahu form the next government.

“It will be a right-wing government but I intend to be the prime minister of all Israel,” the premier told cheering supporters in Tel Aviv, following a divisive campaign where alleged corruption and personal insult overshadowed policy differences.

Sweeping Implications

The election result could ripple across a volatile region. Peacemaking with the Palestinians has stalled under Netanyahu’s watch; instead he opted to improve Israel’s ties with Gulf Arab states by leveraging a shared distrust of Iran. Gantz, a 38-year military veteran, has talked vaguely about “separation” from the Palestinians and hasn’t uttered the term “statehood,” yet he’s signaled he’d make more effort to restart peace talks.

A U.S. peace plan, which the Trump administration says will present new solutions to break the impasse, is expected to be unveiled shortly after the election.

Just ahead of polling, Netanyahu pitched for right-wing voters who might be tempted to back other nationalist factions, suggesting he could annex Jewish settlements in the West Bank.

Palestinian leaders say they see little difference in the policies of Netanyahu and Gantz toward the Israel-Palestinian conflict. Saeb Erekat, the secretary general of the Palestine Liberation Organization, said the exit polls showed Israelis had voted to “preserve the status quo.”

“They have said ‘no’ to peace and ‘yes’ to the occupation,” he said.

Fight of His Life

The contest was the political fight of Netanyahu’s life. The prime minister, who could become his country’s longest-serving leader in July, faced a tough challenge from Gantz, who has the security credentials prized by Israelis and a clean-hands image, but lacks the political experience the prime minister has accrued in a combined 13 years in office. In large part, the campaign was a referendum on Netanyahu’s character, as he’s likely to be indicted on corruption charges later this year.

Attorney General Avihai Mandelblit has said he intends to charge the 69-year-old Netanyahu in three graft cases, pending a post-election hearing. Netanyahu has said he is innocent and will only stand down if convicted. The corruption cases were not enough to sink the politician known as “the magician” because his base stood strong, accepting his claim that the corruption probes were fabricated by opponents who can’t defeat him at the ballot box.

Early exit polls showed Likud slightly trailing Gantz’s party but as the night wore on the picture changed in favor of the premier. Gantz, who only entered politics in late December and built his Blue & White bloc into a powerful insurgent force, declared prematurely that he would form Israel’s next governing coalition. “This is a historic day for Israel,” he told raucous supporters.

Fending Off Pressure

For his backers, Netanyahu has offered strong leadership in a combustible region. He enjoys warm relations with President Donald Trump, who’s delivered him jackpots like withdrawing from the Iran nuclear deal, recognizing Jerusalem as Israel’s capital and recognizing Israeli sovereignty over the Golan Heights.

Taking a lead from Trump, Netanyahu in his speech said he’d triumphed despite the best efforts of an antagonistic media, while “Make America Great Again” flags were waved by members of the audience.

Israel’s economy grew nearly 75 percent during Netanyahu’s decade in power, expanding even during the global recession, though the gains haven’t done much to close the gap between rich and poor.

If he wins, allies could try to enact legislation protecting Netanyahu from prosecution as a sitting leader. Either way, another term could bring as much instability as continuity, with the prime minister preoccupied with battling to clear his name and fending off pressure to resign.

--With assistance from Fadwa Hodali.

To contact the reporters on this story: Amy Teibel in Jerusalem at ateibel@bloomberg.net;Ivan Levingston in Tel Aviv at ilevingston@bloomberg.net;Yaacov Benmeleh in Tel Aviv at ybenmeleh@bloomberg.net

To contact the editor responsible for this story: Lin Noueihed at lnoueihed@bloomberg.net

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