Israel’s Electoral Marathon: Coalition Scenarios and Policy Implications

On March 2, Israelis head to the polls for the third time since April 2019. To assess the state of this very close race and the implications of various outcomes, it is important to understand what has changed since the previous rounds. Three major developments stand out.

First, Israelis have more clarity about Prime Minister Binyamin Netanyahu’s legal status. During September’s vote, many expected that he would be indicted on three counts of corruption, and there was speculation he would seek parliamentary immunity. He was in fact indicted two months later—the first sitting premier to face that situation. On January 28, he withdrew his immunity appeal amid certainty that he could not garner sufficient votes in parliament. His first court date is scheduled for March 17.

Second, the Trump administration finally released its Israeli-Palestinian peace plan. The timing of this release—on the very day when Netanyahu lost his parliamentary immunity—helped him keep the corruption issue from dominating the headlines. Previously, he had asked Washington to hold off on announcing any such plan for fear of alienating elements of his right-wing base, yet he is now prioritizing any gambit that distracts voters from his legal situation.

Third, the politician who likely holds the balance of power between the two main factions has struck a different tone for this round. Besides repositioning his Yisrael Beitenu Party to focus on preserving secular rights and avoiding ultraorthodox encroachment, Avigdor Liberman has sharpened his tone against Netanyahu, publicly declaring that the prime minister should be denied immunity and should resign. This seems to shut the door for him uniting with the Likud Party so long as it is under Netanyahu’s leadership.

WHAT ARE EACH SIDE’S STRATEGIES?

Netanyahu’s core strategy has three components. First, he wants to leverage the U.S. peace plan to his political advantage. He claims that his personal relationship with President Trump enabled the United States to move its positions on peace issues sharply in Israel’s direction. Such claims are also intended to remind voters that he is a serious diplomatic player on the international stage. Indeed, recent polls suggest a widening gap between him and his chief opponent, Benny Gantz, on who is considered more suitable to be premier. The Blue and White Party candidate was neck-and-neck with Netanyahu on this suitability issue two months ago, but he has fallen behind by fourteen points since the Trump plan was released in late January. Yet this has not translated into a comparably large increase in projected votes; although two new television polls indicate that Likud has passed Blue-White for the first time since Netanyahu’s indictment, its newfound lead is slim.

Second, Netanyahu aims to convince voters that the only way Blue-White can form a government is if the Arab-majority Joint List abstains from a parliamentary no-confidence vote against Gantz’s coalition. While the Joint List would not be a formal part of this coalition, Netanyahu insists that its voting leverage would make Gantz dependent on Israeli Arabs in order to govern. When asked in private whether Blue-White can reach a 61-seat majority in the Knesset, multiple people on Gantz’s list say they hope ultraorthodox factions will join them if there is no pathway for Netanyahu to reach a majority.

Third, Netanyahu has focused intently on reversing the drop in Likud votes seen during September’s balloting. According to him, 300,000 Likud voters “stayed home” during round two, yet a comparison of results from April and September demonstrates that many other parties gained at the Likud’s expense. In other words, the issue is not that Likud voters stayed home, but that they shifted their votes elsewhere. In September, the right-wing Sephardic religious party Shas received almost 72,000 additional votes, while Liberman’s party received an extra 137,000.

In any case, Netanyahu has been far more energetic during this round, holding multiple rallies per day across the country. He has also spent an extraordinary amount of time trying to dissuade the militant Kahanist faction Otzma Yehudit (Jewish Power) from running, but to no avail. In his view, the party “wasted” the 84,000 votes it won in September because it fell considerably below the 3.25% electoral threshold required for entry into parliament. To bring Otzma and other hardcore right-wing factions under his banner (among other reasons), Netanyahu declared that he would like to annex all West Bank settlements sooner rather than later, but the White House told him it will not support any such move prior to the election.

Blue-White’s strategy seems focused on Netanyahu’s legal situation. Gantz has hammered on the point that voting for his opponent means electing a part-time premier, since Netanyahu will be absorbed with daily court appearances and endless consultations with lawyers.

Gantz has also sought to reach some right-wing voters by withholding criticism of the Trump peace plan and even saying he would support it. Yet when pressed on the issue, he has backed away. For example, he indicated that he would not annex the Jordan Valley unless there was international support for that step, which is unlikely.  

Moreover, Gantz seems to believe that the decision about who gets the first shot at forming the next government depends not just on which bloc prevails, but also on whether Blue-White wins more votes than the Likud. He is therefore trying to woo voters away from Labor-Meretz to his left by focusing on issues they prioritize (e.g., the future of Israeli democracy if Netanyahu uses the levers of power to insulate himself against legal proceedings).

As for the potential impact of the U.S. presidential election campaign, Gantz and other Israeli actors are generally consumed with their own array of pressing domestic and foreign issues, so they have not said much about what a Democratic victory in November would mean for the Trump plan. Likewise, the vitriolic comments that current Democratic frontrunner Bernie Sanders has aimed at Netanyahu’s government have not figured prominently in the campaign.

COALITION SCENARIOS AND POLICY IMPLICATIONS

Although politicians often step down from their campaign threats once faced with the reality of election results, Israeli party leaders largely kept their promises during the abortive coalition formation efforts that followed the first two rounds of balloting. This may have stemmed from their belief that a third round was inevitable, so they did not want to anger their constituencies. In theory, they could adopt the same strategy and stick to their guns after the March 2 vote, since a fourth round is a very definite possibility. Yet other scenarios could result in actual government formation, with differing implications for Israeli-Palestinian peace and other issues.

Right-wing government. If Netanyahu wins the election and is somehow able to attract 4 to 5 more seats than the estimated 56-57 he currently has, he would likely ask the White House for permission to begin annexing settlements, in keeping with his commitment to right-wing voters (most recent polls project 35 seats going to Likud, 15 to his ultraorthodox partners, and 6 to the Yamina settlers party). This scenario could lead to unrest in the West Bank. Moreover, if he annexes the Jordan Valley, Amman would look for ways to freeze the political elements of the Israeli-Jordanian peace treaty even if it quietly maintains the excellent security cooperation between the two countries.

Centrist government. In this scenario, Gantz would form a two-step coalition that may prove difficult to sustain. He would begin with a minority coalition of 52-53 seats (most recent polls project 35 seats for Blue-White, 10 for Labor-Meretz, and 7 for Liberman). In theory, he would ultimately secure a majority by bringing in the ultraorthodox parties, who rely heavily on state funding for their institutions and poverty programs and would therefore be susceptible to his ample leverage in the Knesset. Once they join Blue-White, Netanyahu would have no pathway to remaining premier.

Yet this arrangement would require Liberman to break at least one of two pledges he made in previous rounds: (1) that he will not sit in a government with the ultraorthodox, and (2) that he will avoid coalitions that tacitly depend on Joint List abstentions during no-confidence votes. At the same time, he has also pledged that there will be no fourth round of voting—without explaining how this is possible if he continues to disqualify options that rely on ultraorthodox or Arab factions.

In any case, if this coalition takes hold, Gantz can be expected to avoid front-loaded annexations in the West Bank, instead seeking new common ground with the Palestinians in order to restart negotiations that have been moribund since 2014. This scenario would likely give Democrats in the United States hope of restoring bipartisanship in the U.S.-Israel relationship. Gantz would also likely make a gesture to American Jewry as a sign of this new chapter.

National unity government. Both sides say they favor a unity government with a rotating premiership, but the idea has been a nonstarter amid Blue-White’s demand for Netanyahu to step down and his refusal to do so. Some are skeptical that this will change given each side’s fear of making compromises that could alienate their base during a potential fourth round. Nevertheless, different permutations of the unity scenario should not be ruled out, particularly given the public’s weariness with endless elections.

Netanyahu has previously demanded that he serve the first two-year term as prime minister in a rotating government, in large part because that post would normally grant him immunity from criminal prosecution. Yet now that he has withdrawn his immunity bid, this rationale is gone. With Netanyahu’s court case beginning on March 17, Gantz likely feels there is no way he could let him go first anyway. If Gantz takes the first rotation, the parties could perhaps reach an arrangement whereby Netanyahu goes second on the condition that he is acquitted of all three corruption charges before assuming office.

Of course, if Netanyahu cannot put together a right-wing government, he may still press his advantage to go first in a unity government. The decision about who gets the first rotation may ultimately depend on whether Liberman and the Joint List are considered part of an overall centrist bloc or not.

Whatever its configuration, a unity government would presumably leave Gantz well-positioned to block most front-loaded annexations. Likud may fight to annex at least one consequential location near the 1967 Green Line, perhaps in areas of Gush Etzion that were depicted as a future part of Israel in tentative Palestinian maps discussed during past peace talks. If so, this could potentially be counterbalanced by a construction freeze in non-bloc settlements located well outside the West Bank security barrier.

David Makovsky is the Ziegler Distinguished Fellow at The Washington Institute and coauthor with Dennis Ross of the book Be Strong and of Good Courage: How Israel’s Most Important Leaders Shaped Its Destiny.