Israel’s election: what next for Netanyahu?

Electoral Context and Current Standing

• Israel is holding its fourth election in less than two years following repeated government collapses since late 2018.
• Prime Minister Benjamin Netanyahu polls at approximately 30 seats or fewer in the Knesset, significantly short of his preferred target of at least 40 seats.
• The election outcome may hinge on small margins, where the performance of one or two small parties crossing the electoral threshold could determine the ruling coalition.
• Netanyahu's gamble to hold early elections in hopes of economic recovery and post-vaccination euphoria failed to yield the anticipated political dividends.

Legal Challenges and Immunity Strategy

• Netanyahu remains in power despite being indicted on charges of bribery, fraud, and breach of trust, as Israeli law does not mandate a Prime Minister's resignation upon indictment.
• The ruling coalition remains stable because the political establishment is weak and split, while Netanyahu maintains total control over his party and allies benefit from his continued tenure.
• If re-elected, Netanyahu faces a scheduled court session on April 5th, 13 days after the election.
• A key objective for a potential third term is passing legislation to grant the sitting Prime Minister immunity from prosecution.
• Netanyahu intends to dismiss the current Attorney General to appoint a successor who might revisit or drop the corruption charges.
• Retaining the premiership is described as an "existential question" for Netanyahu; losing power would strip him of the ability to steer immunity laws or block the trial.

Governance Style and Centralization

• Over the past 12 years, the Israeli system has shifted from a parliamentary model to a centralized, presidential-style administration dominated by Netanyahu.
• During the pandemic and generally in recent months, Netanyahu has bypassed the cabinet, governing through a small circle of personal advisers.
• Foreign policy has become highly personalized; key diplomatic relations (with Gulf states, Russia, and Arab nations) are often managed directly by the Prime Minister or the Mossad director rather than the Foreign Ministry.
• The Foreign Ministry has been increasingly marginalized in handling sensitive regional relationships and global power dynamics.

Potential Challengers and Coalition Dynamics

• Yair Lapid leads the main opposition bloc with a centrist base but has failed to gain traction among right-leaning voters.
• Naftali Bennett, leader of a smaller right-wing party, is positioned as a potential "kingmaker" who could determine the majority for either Netanyahu or an alternative coalition.
• Gideon Saar, a former Likud minister, has formed a breakaway party that opposes Netanyahu but remains within the right-wing spectrum.
• Benny Gantz, a former main opponent, is currently excluded from leading a new coalition due to his participation in the previous unity government and the inability of centrist/left-wing factions to agree on a single leader.
• A primary obstacle for any anti-Netanyahu coalition is resolving internal disagreements on which leader will head the new bloc.

Foreign Policy Implications of Leadership Change

• A change in leadership is expected to improve relations with the US Democratic administration, contrasting with Netanyahu's historically difficult relationship with Democrats.
• Structural bilateral issues, such as the US-Israel relationship, are unlikely to be fully resolved by a new Israeli Prime Minister.
• Regardless of the outcome, the next government is unlikely to support a re-entry into the Iran nuclear deal or significant diplomatic engagement with Palestinians.
• The Palestinian issue remains absent from the current election campaign, suggesting no immediate pressure on the next government to alter existing policies.
• Structural barriers to a Palestinian-Israeli deal are expected to persist regardless of whether Netanyahu remains in power.

West Bank Annexation Prospects

• Netanyahu promised varying forms of annexation in the 2019 and 2020 elections but has not taken concrete steps to implement them since winning.
• The annexation of the West Bank was included in coalition agreements (including with Benny Gantz) but never executed.
• Current analysis suggests Netanyahu did not genuinely intend to carry out immediate annexation during these election cycles.