By Dan Williams (NYSE:WMB)
JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu's rivals on Monday sought to finalise a unity coalition that would unseat the veteran leader, as political commentators predicted a bitter fight ahead.
Centrist opposition chief Yair Lapid won support on Sunday from ultranationalist Naftali Bennett for a "change" government of ideologically disparate rivals.
The deal, in which Bennett would serve first as prime minister under a rotation with Lapid, must be finalised by a deadline of midnight (2200GMT) on Wednesday.
Netanyahu, 71, is the dominant political figure of his generation and his rivals have little in common - except a shared desire to emerge from his shadow and from the unprecedented period of political turmoil which has seen four deadlocked elections in two years.
The morning after Bennett moved against his right-wing rival, political commentary in Israel was divided about everything except the folly of writing Netanyahu off.
"An event took place yesterday whose importance cannot be overstated. A real possibility was created ... an alternative government in every sense of the word," wrote Sima Kadmon in the best-selling Israeli newspaper Yedioth Ahronoth.
But she added: "It’s not over yet. Long days loom in which Netanyahu will do absolutely everything to shift the momentum."
Hoping to discredit Bennett and other right-wingers who refused to back him, Netanyahu, cast them as committing "the fraud of the century" which would, he said, imperil Israel.
The pro-Netanyahu newspaper Israel Hayom said in a banner headline that Bennett and Saar were "in service of the left".
Netanyahu faces other troubles, chiefly a corruption case in which he faces charges of bribery, fraud and breach of trust, all of which he denies.
But the veteran Likud Party leader is a survivor: he was first elected prime minister in 1996 and he returned to power in 2009, holding the top office for more than a decade.
He has also kept the door open for any rightists who might defect, maintaining that he is still capable of forming the next government.
POLICY GAPS
Under Israeli law, Bennett and Lapid have until Wednesday to put together a ruling coalition. If they fail, others get a chance. If everyone fails, the country goes to a fifth election.
However a source briefed on the Bennett-Lapid power-sharing talks said there had been "significant progress" toward a final deal, despite their political differences.
"There's a lot more that unites than separates," the source said.
Bennett, a former defence minister, and Lapid, a former finance minister, both want to invest in education and health, and to head off any lingering economic malaise arising from the COVID-19 pandemic.
However the new coalition will likely mean a stalemate on the Israeli-Palestinian conflict, with marked policy differences between the coalition partners.
Bennett has favoured Israel annexing parts of the occupied West Bank, while his prospective left-leaning allies may argue for ceding territory to the Palestinians.
The source briefed on the talks indicated that Bennett and Lapid had agreed to sidestep the issue: "There's not going to be annexation, there's not going to be final-status withdrawals."
"Final status" is a diplomatic term for an Israeli-Palestinian peace deal, negotiations on which stalled in 2014.
Israel's financial markets were mostly unchanged on Monday with the shekel holding steady at a rate of 3.25 per dollar.
Once a coalition is formed, investors will expect passage of a 2021 state budget. Because of the two-year political stalemate, Israel is using a pro-rated version of the 2019 budget, which was approved in mid-2018.