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Bennett (L) with Netanyahu in 2015. Photo: Gali Tibbon/AFP via Getty Images

In a dramatic shift that comes amid fighting in the Gaza strip and clashes between Jewish and Arab citizens in Israel, right-wing kingmaker Naftali Bennett has announced he will no longer seek an alternative government to oust Prime Minister Benjamin Netanyahu.

Why it matters: Bennett had been on the verge of a power-sharing deal with centrist opposition leader Yair Lapid that would have made him prime minister for two years until Lapid rotated into the job. Without Bennett, Lapid has no path to a majority, and Israel will almost certainly head for its fifth election since 2019 with Netanyahu still in his post.

The big picture: After yet another indecisive election in March, Netanyahu had the first opportunity to form a government but failed to do so. The mandate then passed to Lapid last week, leaving Netanyahu in his most vulnerable position politically since he became prime minister in 2009.

  • In addition to convincing Bennett to join forces with his center-left bloc, Lapid also needed the support of an Arab party to reach a majority. Thus he was also negotiating with Mansour Abbas, the leader of the Islamist Ra'am party.

Driving the news: Those negotiations were suspended after the fighting in Gaza started on Monday, with Abbas suspending his participation and Bennett also wavering.

  • Just as the crisis made it politically difficult for Abbas to consider joining the next Israeli government, it also increased the pressure on the conservative Bennett to reject any pact with Ra'am, which is a sister movement to Hamas.

Bennett announced on Thursday that an alternative government was no longer on the table, and said he would instead negotiate with Netanyahu over a potential right-wing government.

  • He cited the "emergency situation" in Israeli cities that have both Israeli and Arab citizens, which he said "demands the use of force and sending the military into the cities” — something that would be impossible in a government backed by Ra'am.
  • Lapid gave a speech shortly thereafter and said Bennett was making a mistake. He stressed that he would continue to try to form a government for the 20 days remaining in his mandate. “If we can’t, we will go for an unneeded election and we will win," Lapid said.

Between the lines: The collapse of the alternative government shows the deep effect the inter-communal violence in Israel has had on the country’s politics, far beyond the fighting in Gaza.

What’s next: The expiration of Lapid's mandate will be followed by a 21-day period in which any member of the Knesset can form a government if they can get the support of 61 members of the 120-member body.

  • During this period, Netanyahu is expected to try and pass a law to change the electoral system to allow prime ministers to be directly elected.
  • Bennett could potentially strike a deal with Netanyahu to merge his Yamina party with Netanyahu's Likud to get prime spots on the Likud electoral list.

Worth noting: Netanyahu will likely wage the next election campaign while standing trial for corruption.

Go deeper

Aug 18, 2021 - World

Dispute with Poland on Holocaust shows Israel's shift on EU relations

Netanyahu (R) in 2019 with Polish President Andrzej Duda (C) and then-Vice President Mike Pence. Photo: Janek Skarzynski/AFP via Getty Images

The diplomatic crisis over a Polish law limiting the ability to introduce claims to property confiscated during World War II is a manifestation of the shift in Israeli policy toward Europe under the new government.

Why it matters: The bill will mostly impact Holocaust survivors and their descendants, and it's seen by the Israeli government and the Biden administration as another step by Poland's government to rewrite the country's history around the Holocaust.

Aug 18, 2021 - World

Scoop: CIA director raised China concerns with Israeli prime minister

The U.S. has raised concerns about Chinese investment in the Port of Haifa project. Photo: Emmanuel Dunand/AFP via Getty

While visiting Israel last week, CIA director Bill Burns told Prime Minister Naftali Bennett the U.S. was concerned about Chinese investments in Israel, particularly in the tech sector, and involvement in major infrastructure projects, Israeli officials tell Axios.

Why it matters: That's the highest level at which the Biden administration has raised an issue that previously became a rare point of contention between the Trump and Netanyahu governments.

Dems' immigration plan hits major roadblock

Senate Majority Leader Sen. Chuck Schumer. Photo: Alex Wong/Getty Images

The Senate parliamentarian ruled Sunday that Democrats cannot include pathways to citizenship in the $3.5 trillion budget reconciliation package, per a copy of the ruling obtained by Axios.

Why it matters: It's a blow to Democrats who hoped to provide pathways for millions of undocumented immigrants in the U.S. Using reconciliations would have allowed them to pass politically contentious immigration changes with only 50 votes, as opposed to the usual 60 required.