Israel’s Midnight Surprise

I just returned from Israel and the West Bank where I accompanied the Quartet Representative, former Prime Minister Tony Blair, for meetings with Israeli and Palestinian leaders. Israelis and Palestinians already were already absorbed by the impending election campaign, having rapidly internalized an apparent decision by Prime Minister Benjamin Netanyahu to dissolve his government and hold elections on September 4.

Several hours ago, early Tuesday morning Israel time, Netanyahu surprised everyone in Israel by reaching agreement to form a national unity government with the new leader of Kadima, Shaul Mofaz. Instead of holding elections on September 4, the prime minister instead reportedly plans to serve out the remainder of his term, which is set to expire late in 2013.  Under the agreement, the centrist Kadima party will join Netanyahu’s government with Mofaz, who just took over as party head two weeks ago, likely to become deputy prime minister and minister without portfolio.

Israelis will awake in a few hours to the surprise news. While many Israeli politicians will denounce Netanyahu’s decision to abort the elections, in reality, many of them will be relieved. Netanyahu was taking Israel to the polls right now precisely because his political standing is extremely strong right now. For Mofaz’s Kadima, the agreement provides relief, given that polls suggested that it would lose two-thirds of its current 28 Knesset seats. It could mean the end of the party, however, if Netanyahu succeeds in reintegrating some of the former Likud members who had joined Kadima when Prime Minister Sharon formed the party in 2005.

It is within the hard right in Israel that some of the greatest dissatisfaction could emerge. Kadima and Likud combined now hold almost a simple majority in the Knesset. Avigdor Lieberman’s Yisrael Beiteinu just lost its three-year-old veto over any Netanyahu initiatives. Some within the prime minister’s own Likud will be also displeased, particularly if they are forced to give up cabinet seats or other prized positions to make room for their new Kadima partners. Those to the right of Netanyahu will also now worry that the prime minister may tack to the center on issues related to the Palestinians.

For Defense Minister Barak, the agreement provides a new lifeline, since it was not clear that his new breakaway faction from Labor would pick up a single seat in the next election. Labor, now headed by Shelly Yacimovich, had picked up a number of seats in the polls, but was nowhere close to being able to pose a serious challenge to Netanyahu. With Kadima now in the government, Labor will return to the role it has mainly played since 1977, that of being the leader of the opposition. This could help awaken the somnambulant left in Israel.

As Israel enters its summer, Netanyahu’s greatest challenge could emerge from elements within the country not represented in the Knesset: the social protest movement. Last summer, Israel witnessed unprecedented social protests that brought hundreds of thousands of Israelis to the streets for a number of months. These demonstrators rallied against skyrocketing housing and living costs, government corruption, and increased income disparities. In recent days, the grass-roots leadership of the social movement had begun to be courted by some of Israel’s political parties in the hope that these largely unaffiliated demonstrators could be mobilized behind the traditional parties. With elections no longer impending, the social activists may see the only alternative open to them this summer as being a return to the streets. Such a development will be no boon to Netanyahu’s free-market oriented Likud could leave the prime minister wishing he had proceeded with his plan to hold early elections at a time when a relatively easy victory appeared almost assured.