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Naftali Bennett (left) today with Yair Lapid. Photo: Ronen Zvulun/POOL/AFP via Getty

With opposition leader Yair Lapid's mandate to form a new government set to expire at midnight (5pm ET), negotiations are down to the wire with no deal yet.

Why it matters: If Lapid and Naftali Bennett can finalize their deal today, Prime Minister Benjamin Netanyahu will be out of power for the first time in 12 years. If they can't, Israel will likely head for a fifth election since 2019 with Netanyahu still in office.

The state of play: Lapid and Bennett have been closing in on a power-sharing deal that would make Bennett prime minister for two years before Lapid rotates into the job, but two gaps have prevented an agreement.

One has to do with Ayelet Shaked, Bennett's deputy in the right-wing Yamina party.

  • She has raised several last-minute demands, like obtaining a seat on the committee that appoints judges. That would give the right-wing faction of the government more power relative to the center-left and undermine the framework the parties had reached.
  • In recent days, there have been demonstrations by Netanyahu supporters near Shaked's home calling on her to refuse to join a government with the center-left. Her security was also increased due to death threats.
  • Between the lines: If Shaked drops out, the rest of Bennett’s party will follow. Sources involved in the negotiations say it’s unclear whether she is just seeking additional concessions or looking for a way to backtrack from joining the government.

Meanwhile, the Islamist Ra'am party has also raised new demands in the last 24 hours.

  • Several of Ra'am’s demands, like the cancellation of a law that makes it easier to conduct demolitions in Arab towns and villages inside Israel, were rejected by the right-wing faction.
  • The sources involved in the negotiations accuse Netanyahu of working behind the scenes to offer Ra'am leader Mansour Abbas new proposals if he rejects the Lapid-Bennett government, which they say led Abbas in turn to toughen his demands in the coalition negotiations and potentially sabotage them.
  • Without Ra'am, Lapid and Bennett can't reach a majority.

The big picture: The proposed "change government" would be Israel's widest-ranging coalition in history, involving parties from across the political spectrum united only in their desire to remove Netanyahu.

  • The government could end Israel's cycle of continuous elections.
  • However, the last-minute snags in the negotiations are proof of how fragile the coalition will be even if it is formed and how much pressure Netanyahu and his supporters will be able to exert on its right-wing members.

What’s next: If Lapid and Bennett announce an agreement today, the swearing-in will likely be set for next Wednesday. That would give Netanyahu another week to try to peel members away and block a majority.

  • If no government is formed by midnight, Netanyahu will have another 21 days to try to convince members of the anti-Netanyahu bloc to join him in a right-wing government.
  • During this period, any member of the Knesset who gets the signatures of 61 members can form a government. Failing that, a fifth election looms.

Go deeper

Sep 8, 2021 - World

Israel PM Bennett to make rare public visit to Egypt

Photo: Sean Gallup/Getty Images

Israeli Prime Minister Naftali Bennett is expected to travel to Egypt next week for the first public visit by an Israeli prime minister in over a decade.

The big picture: Israel officials speculate that by inviting Bennett publicly so early in his term, President Abdel Fattah al-Sisi's government is trying to signal Egypt's importance in the region to the Biden administration.

Sep 8, 2021 - World

Despite Biden statement, Israel is a long way from U.S. visa waiver

Passport control at Dulles Airport. Photo: Paul J. Richards/AFP via Getty

Bennett left Washington with a notable "deliverable": Biden had promised to work toward bringing Israel into the U.S. visa waiver program.

Why it matters: Admission to the program has been an Israeli aspiration for decades. The issue resonates with many Israelis who may have family, friends or business connections in the U.S. but are intimidated by the visa process or put off by the costs.

Ina Fried, author of Login
1 hour ago - Technology

Intel CEO sees making own chips as a matter of national security

Pat Gelsinger. Photo: Axios on HBO

Intel CEO Pat Gelsinger is putting the pressure on the U.S. government to help subsidize chip manufacturing, insisting the current reliance on plants in Taiwan and Korea as "geopolitically unstable."

Why it matters: There is bipartisan support for funding the domestic semiconductor industry, but Congress has yet to sign the check. The Senate has passed the CHIPS Act that includes $52 billion in semiconductor investment, but it has yet to pass the House.