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Photo Illustration: Eniola Odetunde/Axios. Photos: Pool, Gali Tibbon/Getty Images

Israeli Defense Minister Benny Gantz may have put the last nail in the coffin of Israel's power-sharing government when he formed an inquiry panel to probe the "submarine affair," a scandal that has ensnared some of Netanyahu's close advisers and confidants.

Why it matters: For Netanyahu, this is a declaration of war by his coalition partner. The inquiry could lead to the conclusion that Netanyahu mishandled sensitive national security matters and cause him major political damage.

  • In an extreme scenario, it could lead to the reopening of a police investigation against him.

The backstory: The scandal involves the purchase in 2016 of submarines and warships from a German company. An investigation into alleged corruption connected to the deal has already led to indictments against Netanyahu allies, but the prime minister has not been investigated as a suspect.

  • Still, serious questions were raised about his decision-making around the two deals, which were worth billions of dollars and involved one of Israel’s most sensitive weapon systems that, according to foreign press reports, can carry nuclear weapons.
  • Under his authority as defense minister, Gantz formed a panel to investigate those decisions.

How it happened: Gantz promised such an inquiry while campaigning against Netanyahu but shelved the initiative after forming a government with him.

  • Under pressure from within his party, and increasingly confident that Netanyahu plans to renege on the deal that would see them switch jobs next year, Gantz made his move.
  • He has faced sharp criticism from his base for forming a government with Netanyahu in the first place, and decided to cut his losses before new elections are called in the next four weeks.

What's next: The deadline for passing a budget and preventing elections is Dec. 23, but many inside Gantz’s party are pressing him to vote with the opposition in favor of dissolving the Knesset as early as next week.

  • Gantz believes Netanyahu won't pass a budget that locks in the government long enough for him to become prime minister.
  • If the Knesset dissolves in the next four weeks, elections are expected in March 2021.
  • Gantz gave the inquiry panel a four-month deadline, with an unstated goal of publishing the conclusions days before the new elections.

New polls published on Tuesday showed that even though Netanyahu’s favorability plummeted during the COVID-19 crisis, he still has the best chance of forming a government if new elections are called.

  • The polls showed Netanyahu's right-wing bloc winning between 64 and 68 seats, above the 61 needed for a majority.

The Bibi Barometer is a weekly feature of our Axios from Tel Aviv newsletter. Sign up.

Go deeper

Israel's Netanyahu condemns the attack on Congress

President Trump and Israeli Prime Minister Benjamin Netanyahu (right) at the White House, Sept. 15, 2020. Photo: Saul Loeb/AFP via Getty Images

Israeli Prime Minister Benjamin Netanyahu condemned the attack on Congress, which came as it was certifying the Electoral College vote for Joe Biden, and stressed that American democracy will prevail.

Why it matters: Netanyahu, who has been President Trump’s most loyal ally among world leaders, delivered the statement at the top of his meeting in Jerusalem with Treasury Secretary Steve Mnuchin. The prime minister neither criticized Trump nor referred to him directly.

Jan 6, 2021 - World

Netanyahu aides fret that "Obama people" will shape Biden's Iran policy

Some members of Netanyahu's inner circle aren't happy to see Susan Rice and John Kerry back in the White House.

Members of Israeli Prime Minister Benjamin Netanyahu's inner circle are concerned that President-elect Joe Biden is filling his administration with veterans of the Obama administration, some of whom they've had difficult relations in the past, particularly over Iran.

Why it matters: The Biden and Netanyahu administrations are on course for an early clash over the Iran nuclear deal. Several of Netanyahu’s aides at the Israeli National Security Council have been grumbling about the fact that Biden will be surrounded by "Obama people" — including the deal's architects and some of its fiercest advocates.

Jan 6, 2021 - World

Scoop: Embassies are "natural next step," Moroccan king tells Netanyahu

Security forces in Rabat, Morocco, monitor protests against normalization with Israel. Photo: Fadel Senna/AFP via Getty

Morocco went most of the way to normalizing relations with Israel last month, but only committed to opening liaison offices, rather than embassies.

Why it matters: That decision led to speculation that Morocco was waiting to see if the Biden administration would roll back Trump's recognition of Moroccan sovereignty over Western Sahara before going all the way with Israel. It also disappointed Netanyahu, who hoped Morocco would commit to full embassies, according to a senior Israeli official.

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