What’s happened?

National Unity, the centre-right opposition party that joined an emergency government on October 11th at the start of the Gaza war, boycotted the weekly cabinet meeting on January 7th, saying it would not be discussing substantive issues relating to the fighting. On January 14th the cabinet also failed to agree on a revised 2024 budget. We expect cracks in the coalition government to widen further and National Unity to leave the government soon.

Why does it matter?

National Unity’s agreement to join Benjamin Netanyahu’s extreme-right government signalled an effort both to heal political divisions stemming from the government’s controversial judicial reforms and to add expertise to a cabinet lacking deep diplomatic and military experience apart from the often marginalised moderate defence minister, Yoav Gallant. National Unity’s leader, Benny Gantz, is a former chief of staff (as is his deputy, Gadi Eisenkot) and defence minister. Both joined a war cabinet that has taken charge of the military campaign.

However, tensions within the war cabinet have risen as Mr Gantz has accused the prime minister of politicising the war effort in the hope of remaining in office longer. That includes Mr Netanyahu allowing his far-right allies to attack the defence establishment for failing to conduct a sufficiently brutal offensive in Gaza and covering up government responsibility for the failures of October 7th. These attacks came to a head at a meeting of the security cabinet January 4th, which led to the cabinet boycott days later. In a bid to sustain his coalition, Mr Netanyahu has given free rein to far-right leaders to call for expelling Palestinians from Gaza and restoring Israeli settlements there, causing the government repeated embarrassment internationally and undercutting its case at the International Court of Justice. Mr Netanyahu’s anxiety about not alienating his far-right partners has also reportedly deterred him from holding discussions on post-war policy towards Gaza. Nevertheless, Mr Netanyahu still needs Mr Gantz’s backing to sustain diplomatic support from the US and broader domestic backing as his own party, Likud, has plunged in popularity.

What next?

Politically, it would be advantageous for Mr Gantz to leave the government soon if he could be sure this would lead to early elections as his party has made huge gains in opinion polls, but he is concerned that this would harm national unity and give the far right more influence over the war. The government would still retain a majority were National Unity to leave—which we expect it to do before the fighting ends—but public opposition to the government is mounting, which is likely to eventually lead to its collapse and elections later in 2024, with Mr Gantz well placed to lead the next coalition government.

The analysis and forecasts featured in this piece can be found in EIU’s Country Analysis service. This integrated solution provides unmatched global insights covering the political and economic outlook for nearly 200 countries, enabling organisations to identify prospective opportunities and potential risks.