In a surprise move that caught even Knesset members from their own parties unawares, Prime Minister Benjamin Netanyahu and Foreign Minister Avigdor Liberman agreed that their respective Knesset factions, Likud and Yisrael Beytenu, will form a new right-wing super-faction to contest January’s general elections.

Netanyahu and Liberman formally announced the partnership to the media at Jerusalem’s Dan Panorama Hotel at 8:00 p.m.

“The merger initiative brings us much closer to victory in the elections,” Netanyahu was quoted by Channel 10 News as saying. “It will [also] greatly increase the Israeli prime minister’s ability to govern. In effect, the changing of [Israel’s] system of government begins today.”

“It’s a great opportunity for us in the center,” countered senior Labor MK Isaac Herzog. The new alliance “will be an extremist North Pole, and we’ll be the leading centrist force,” he said.

Liberman served as the director-general of the Prime Minister’s Office during Netanyahu’s first term as prime minister in the late 1990s, but then set out on his own to form Yisrael Beytenu, a party with particular appeal to voters from the former Soviet Union. Himself an immigrant from Moldova in the late 1970s, Liberman lives in the West Bank settlement of Nokdim and has charted a political course a little to the right of Netanyahu’s Likud in recent years.

“This move will sharpen the differences between right and left, and it will boost our capacity to govern, and to grapple with the challenges facing Israel,” the Likud’s Education Minister Gideon Sa’ar said Thursday evening, welcoming the news and pledging to support the partnership. Sa’ar clarified that the parties were not merging but, rather, would run together on a joint list for the January 22 elections. “Rather than forming a coalition partnership after the elections,” he said, the parties were “forming an alliance before the elections.”

Such unity, he said, was “good for the State of Israel.”

This would be “a radical, extremist government,” said left-wing Meretz party leader Zahava Gal-on, coining the term “Biberman government” to describe the merger. She said the hawkish Liberman, as foreign minister, had isolated Israel diplomatically, and that the new partnership meant the now-“settler-esque” Netanyahu was completely throwing in his lot with the West Bank settlements.

“This sends the message that the governing bloc will continue to incite against the left and against the Arabs,” she said. “The fascism in the Likud back benches is now – with the Liberman merger – coming to the fore.”

One of the leaders of the Shas ultra-Orthodox party, Eli Yishai, said he was “completely taken by surprise” by what he called an “exciting” development. He speculated it might prompt parties on the center-left, including Kadima, Labor and Yair Lapid’s new Yesh Atid, to follow suit and run together.

Gal-on urged the leaders of Labor and Yesh Atid to promise not to join the new super-faction in government.

Internal surveys were reported to have shown that the joint list would win more than 50 seats in the upcoming elections, a total unheard of by a single party in decades, and one that if realized would virtually guarantee Netanyahu continuing as prime minister in the next parliament, no matter which candidates ran and no matter which alliances were formed against him. In the current 120-seat Knesset, Kadima is the biggest party, with 28 seats, followed by the Likud, with 27. A resurgent Labor Party, which has eight seats in the outgoing parliament, has been predicted in most opinion polls to become the second biggest party to the Likud after the elections.

Likud Knesset member Carmel Shamah-HaCohen told Army Radio that the partnership had been hatched in private. He said it was not clear how the joint list of candidates for the Knesset would be drawn up. The Likud is shortly set to choose its Knesset representatives, as voted by the entire party membership. The Yisrael Beytenu Knesset slate, by contrast, is drawn up by a small panel controlled by Liberman himself.

Michael Eitan, a veteran Likud MK who is seen as unlikely to gain a place high enough on the Likud slate to return to the Knesset, slammed the alliance as potentially marking “the demise of the Likud” and said it was anti-democratic. He called for a meeting of the party’s Central Committee to reject it.

In recent months, some voices on the left have called for former prime minister Ehud Olmert to throw his hat into the ring, arguing that he was the only candidate who had a real shot at dethroning the popular Netanyahu. First reports suggested the new partnership was hatched in part to counter the possibility of pro-Olmert momentum prompting shifts in public voting inclinations.

Olmert has delayed making a decision on a political comeback, as he grapples with ongoing legal difficulties. So, too, has another former senior politician, Tzipi Livni, who may now be more likely to return to politics, perhaps in some kind of an alliance with Labor.

In the current Knesset, the two merging parties hold 42 seats between them — Likud 27, and Yisrael Beytenu 15. Analysts speculated that their joint slate would be built on a basis proportionate to the two parties’ current Knesset status — with approximately two out of every three slots for the Likud.

Thursday’s move marked the second party-partnership bombshell dropped by Netanyahu in recent months. In May, in a late-night move when the Knesset was about to vote for early elections, he announced a merger with Shaul Mofaz’s Kadima and built a new coalition. That partnership collapsed after less than three months, however, setting in motion the process that ultimately led to the scheduling of elections for January 2013.

Insiders said Netanyahu had spoken often with colleagues in recent months about the possibility of mergers with other factions, including with Defense Minister Ehud Barak’s Atzmaut (Independence) party. Other Likud leaders strongly objected to that alliance, however, leaving Barak now with a struggle to retain his Knesset seat.