Even with budget test passed, key challenges threaten unity of diverse coalition

Several contentious issues are stirring passions within the government as it attempts to forge a ‘stable’ life beyond the budget. Here are 4 of the main areas of potential division

Raoul Wootliff

Raoul Wootliff is the producer and occasional host of the Times of Israel Daily Briefing podcast.

Coalition members pose for a celebratory picture after passing the 2022 budget, November 5, 2021 (Idit Silman, via twitter)
Coalition members pose for a celebratory picture after passing the 2022 budget, November 5, 2021 (Idit Silman, via twitter)

In a celebratory press conference held Saturday night alongside Foreign Minister Yair Lapid and Finance Minister Avigdor Liberman, Prime Minister Naftali Bennett hailed the passing of a new budget a day earlier as the end of “three years of instability.”

The Knesset passed Israel’s 2022 budget early Friday morning, clearing the complex legislation’s last hurdle and capping a major success for Bennett’s unlikely ruling alliance of eight ideologically disparate parties. The 2021 budget was approved early Thursday.

Failure to pass the 2021 budget before November 14 would have resulted in the dissolution of the government and snap elections, the fifth in two years.

Bennett, however, said the coalition had “passed a budget that will ensure political and financial stability… The fact that we are not in the midst of the fifth round of elections is a blessing and a great gift to the State of Israel.”

“The government is stable. It will last out its term,” he declared.

But while Bennett — flanked by Lapid and Liberman — was eager to present a united government front moving forward, a number of potentially contentious issues are already threatening the relative calm within the coalition.

Prime Minister Naftali Bennett, flanked by Foreign Minister Yair Lapid (left) and Finance Minister Avigdor Liberman, speaks at a press conference in Jerusalem, on November 6, 2021 (Haim Zach/GPO)

Just weeks ago, rifts centering around several measures taken by the new government regarding the conflict with the Palestinians had coalition parties on the left claiming they had been frozen out and warning of a looming confrontation.

Now, with the budget passed, some of those issues, as well a number of moves relating directly to now-opposition leader Benjamin Netanyahu, appear to be presenting themselves as possible hazards to the stability Bennett is promising.

1. ‘No place for US consulate in Jerusalem’

Answering press questions Saturday night, Bennett and Lapid presented a united front in their opposition to the United States reopening its consulate for the Palestinians in Jerusalem.

The prime minister said that “there is no place for an American consulate that serves the Palestinians in Jerusalem.” This had been conveyed to Washington “both by myself and by Foreign Minister Yair Lapid,” he said.

“We are expressing our position consistently, quietly and without drama, and I hope it is understood. Jerusalem is the capital of Israel alone,” Bennett said.

Lapid backed Bennett up, saying that “if the Americans want to open a consulate in Ramallah we have no problem with that.” But “sovereignty in Jerusalem belongs to one country — Israel.”

But some coalition members — notably including left-center Labor and left-wing Meretz — are more open to the US stance, and less willing to risk confrontation with the US over the issue.

Lapid rejected the notion that with the government more stable following the budget’s passing, the leaders may be more willing to take on such a politically touchy subject.

“It’s not a question of politics. It’s an Israeli objection on principle to opening a consulate in Jerusalem. There’s an American embassy [here].”

View of the US Consulate building in Jerusalem on October 27, 2021, currently serving the US Embassy (Yonatan Sindel/Flash90)

US President Joe Biden has pledged to reopen the consulate, but the issue has been a sticking point between Israel and the US, as well as among some members of US Congress. The consulate was shuttered by then-US president Donald Trump in 2019 and its staff was folded into the US embassy — which had been moved from Tel Aviv to Jerusalem a year earlier — in what the Palestinians viewed as a downgrading of their ties with the US.

Late last month, a senior official in the US State Department told senators that Israel’s permission would be required before the US could reopen its consulate in Jerusalem serving Palestinians.

Asked about the issue during a press conference alongside Lapid in Washington two weeks ago, US Secretary of State Antony Blinken reiterated the Biden administration’s intention to proceed with the plan.

“As I said in May, we’ll be moving forward with the process of opening a consulate as part of deepening those ties with the Palestinians,” he said.

However, behind closed doors, Lapid reportedly warned Blinken that such a move could risk toppling the coalition government made up of parties with ideologies across the political spectrum.

2. East Jerusalem construction projects

In another issue relating to both the Palestinians and the US, the Israeli government is quietly advancing several controversial construction projects in and around Jerusalem in a move that critics say will pave the way for rapid growth once the political climate changes.

Last week, as Lapid met with US officials in Washington, a local planning committee in Jerusalem approved the expropriation of public land for the controversial Givat Hamatos neighborhood, which would largely cut Palestinian parts of East Jerusalem off from the southern West Bank.

The same committee advanced plans for the construction of 470 homes in the existing East Jerusalem neighborhood of Pisgat Zeev. And authorities have scheduled a December 6 hearing for another project in East Jerusalem to build 9,000 homes in the Atarot area on the city’s northeastern edge.

A military body has meanwhile scheduled two meetings in the coming weeks to discuss a planned settlement of 3,400 homes on a barren hillside outside Jerusalem known as E1. Critics say it would largely bisect the West Bank, making it impossible to establish a viable Palestinian state alongside Israel. A two-state solution is still seen internationally as the only realistic way to resolve the conflict.

That solution is strongly backed by Labour and Meretz, whose critical stance on settlement building is at odds with the pro-settlement ideology of Bennett’s Yamina, Gideon Sa’ar’s New Hope and Avigdor Liberman’s Yisrael Beytenu.

The Atarot industrial zone, with the Ramallah suburb Kafr Aqab seen in the background. (Miriam Alster/Flash90)

Israel regards all of East Jerusalem as part of its undivided capital and says it should be able to build there at its own discretion. But most of the international community has never recognized Israel’s annexation of East Jerusalem and regards Jewish neighborhoods there as settlements.

Every Israeli government since 1967 has expanded Jewish neighborhoods in East Jerusalem and settlements in the West Bank, territories the Palestinians want for their future state. The Palestinians view the settlements and Jewish neighborhoods in East Jerusalem — now housing some 700,000 people — as a major obstacle to peace, and most of the international community considers them illegal.

Israel views the West Bank as the biblical and historical heartland of the Jewish people, but it has refrained from annexing the territory because of international pressure and because it is home to more than 2.5 million Palestinians, the absorption of whom could erode Israel’s Jewish majority.

While Bennett and a number of coalition leaders are opposed to a Palestinian state, his unwieldy coalition of parties from across the political spectrum — some opposed to Israeli settlements in the West Bank — appears to be seeking a middle ground that would sideline the issue at home and abroad.

3. The submarine scandal

If opposition to the US Jerusalem consulate and support of West Bank construction is irking those on the left of the coalition, two hot-button internal political issues are rankling some of those on the right.

Last Sunday, at the start of the crucial budget vote week, Defense Minister Benny Gantz submitted a formal request for a government inquiry into the so-called “submarine affair,” a murky deal between Israel and a German shipbuilder for naval vessels, which has already resulted in multiple indictments.

The scandal, also known as Case 3000, revolves around allegations of a massive bribery scheme in Israel’s multi-billion-shekel purchase of naval vessels — submarines and large missile ships — from German shipbuilder Thyssenkrupp. Several of those involved in the agreement have been indicted over the affair, including close confidants of former prime minister Netanyahu, who called for the procurement, though not the ex-premier himself.

The scandal also involved the sale of two Dolphin-class submarines and two anti-submarine warships by Germany to Egypt, allegedly approved by Netanyahu without consulting or notifying then-defense minister Moshe Ya’alon and then-IDF chief of staff Gantz. Israel had long been granted an unofficial veto over such sales by Germany.

Prime Minister Benjamin Netanyahu touring the INS Tanin submarine, built by the German firm Thyssenkrupp, as it arrived in Israel on September 23, 2014. (Kobi Gideon/GPO/Flash90)

“The formation of the commission is critical for the defense establishment and the State of Israel — if we do not uncover the truth, we will not be able to learn lessons for the future,” Gantz said in a statement last week.

Though there have long been calls for a government investigation into the affair by opponents of Netanyahu, his supporters have claimed that such a probe would be politically motivated, an allegation that Gantz has rejected.

While Lapid’s Yesh Atid and other coalition parties have come out publicly in favor of a commission of inquiry, Bennett’s Yamina has so far not commented on the proposal, which it vehemently opposed before the formation of the new government.

In light of the potential political fight that could erupt, the vote on the commission was scheduled to take place only after the government passed the budget, allowing for upcoming partisan brawls on the issue.

4. Barring Netanyahu from office

The right-center-left government formed in June was nicknamed the “change government” because it ousted the Likud party’s Netanyahu from power, pledging to change the political discourse after 12 years of consecutive rule by Israel’s longest-serving prime minister.

In a possible effort to do that, Justice Minister Gideon Sa’ar, leader of the right-wing New Hope party, has proposed a law to bar lawmakers charged with a serious crime from becoming prime minister, which if approved would prevent Netanyahu from returning to power.

The proposed amendment to Israel’s semi-constitutional Basic Laws would block any Knesset member indicted for a crime that includes a minimum sentence of three years and moral turpitude from being tasked by the president with forming a government.

Such an MK could also not be included in a vote of confidence in a new government or become alternate prime minister. The proposed law, if approved, would take effect after the next elections when a new Knesset is sworn in.

Netanyahu is currently on trial for fraud and breach of trust in three cases, and bribery in one. He denies any wrongdoing and claims to be a victim of an attempted political witch hunt involving the police, prosecutors, left-wing opposition and the media.

Prime Minister Benjamin Netanyahu arrives for the first session of the evidentiary stage of his trial at Jerusalem District Court on April 5, 2021.(Oren Ben Hakoon/Pool)

However, it is currently unclear if the bill has sufficient support to advance. Hebrew media reports have said that Interior Minister Ayelet Shaked and MK Nir Orbach — both members of Bennett’s Yamina party — oppose the bill. The coalition’s Islamist Ra’am party also reportedly has unspecified reservations about the proposal.

Bennett, who has previously signaled he would oppose such a law, has not publicly commented on the proposal, but the Kan public broadcaster reported that the premier gave Sa’ar “the green light” to go ahead with releasing the details of the bill last month.

The coalition’s success in passing the budget was seen as a rebuke of Netanyahu, who had been unable, and at times unwilling, to pass a new budget since 2018 amid a series of political deadlocks, and who had predicted that the coalition would be unable to effectively run the country given the competing ideologies at play.

While Netanyahu has been proved wrong regarding the budget, his forecast of trouble due to a lack of internal coalition cohesiveness may yet prove more accurate.

Times of Israel staff contributed to this report.

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