Netanyahu's coalition suffers embarrassing defeat in Israel

• But for Netanyahu, this is perhaps the best result he could have hoped for as he struggles to put the drama over the judicial overhaul plan behind him, while also keeping his coalition together.

Flashback: Israel faced political and economic instability and unprecedented social unrest since Netanyahu's government announced its plan to weaken the country's Supreme Court in January.

• The government also faced mounting pressure from the U.S. and other allies to suspend the legislation and ensure any judicial reforms were based on a broad consensus in Israel.
• In late March, Netanyahu suspended the legislation to allow for negotiations between his coalition and the opposition to take place under the auspices of President Isaac Herzog.

How it happened: The Knesset voted on Wednesday to elect the two lawmakers who will serve on the committee that appoints judges. Historically, the coalition and the opposition each have one representative on the committee.

• The system of appointing judges and the formation of the committee are the most sensitive issues in the government’s judicial overhaul plan. The plan envisions a takeover by the coalition on the process of appointing judges.
• Netanyahu in recent days made clear to Herzog, Israeli opposition leaders and the Biden administration that he would maintain the status quo regarding the formation of the committee and not divert from tradition.
• By doing that, Netanyahu would have given a clear signal that the main parts of the original judicial overhaul were dead and that he was heading toward a deal on a compromise formula that would get a broad consensus.

Yes, but: When Netanyahu convened the leaders of the coalition to make a final decision this morning, Justice Minister Yariv Levin, who is leading the judicial overhaul, and the leaders of the far-right parties pressed the Israeli prime minister to elect two members of the coalition to the committee.

• Under that pressure, Netanyahu decided to backtrack on his original plan. He ordered the coalition candidates to withdraw and told his coalition members to cast their ballots against the opposition candidate with the aim to ensure that no lawmaker was elected to the committee.

But, but, but: The results of the vote were delayed, prompting rumors that the coalition's plan may have gone awry.

• When the results were finally announced, it became clear that the opposition representative received 58 votes in favor and only 56 votes against.
• This meant that four members of the coalition voted against the decision of their party leaders.

State of play.... Netanyahu and his coalition now have two primary options: call another vote in 30 days to choose the second representative for the committee, likely a member of the coalition, or stall, which would block the committee from forming.

• Following the vote, opposition leaders Yair Lapid and Benny Gantz announced they were suspending the negotiations with the coalition on the judicial overhaul until the coalition appoints its representative.

Our thought bubble: For Netanyahu, who wants to compromise and was concerned by a possible collapse of the overall negotiations, more anti-government protests and a crisis with the White House, this is quite a good result.

• But the results of the vote are also likely to increase the pressure on Netanyahu from his far-right partners and exacerbate the tensions within the coalition and his Likud party, which is divided on the issue of the judicial overhaul.