Israel heads for possible third election as Netanyahu and Gantz talks fail

Neither the prime minister nor his main rival has the required majority to build a coalition government

Likud leader Benjamin Netanyahu, left, Israeli President Reuven Rivlin, centre, and Benny Gantz, leader of Blue and White coalition, attend a memorial ceremony in Jerusalem in September. AFP

Israel faces the increasing likelihood of a third election after another fruitless meeting between Prime Minister Benjamin Netanyahu and his chief challenger Benny Gantz.

Neither Mr Netanyahu nor Mr Gantz has the required majority to build a coalition government. Mr Netanyahu's right-wing Likud party and Mr Gantz's centrist Blue and White coalition achieved near parity in September's repeat elections, but even with allied parties both fell short of the 61 seats needed.

Kingmaker Avigdor Lieberman has refused to give either the nudge for the required majority in Israel's 120-seat parliament and has urged them to join in a unity government as a way out of the stalemate. But on Wednesday he refused to endorse either candidate, virtually sealing the unprecedented third election.

But after weeks of negotiations, Mr Lieberman said he could not endorse either side.

"I made every effort. I turned over every stone," he said.

Mr Gantz and Mr Netanyahu have refused to bend on their conditions for such a unity agreement. Their meeting late on Tuesday made no headway.

Mr Gantz has a midnight deadline for Wednesday to present a potential coalition government. If he fails, as expected, the country enters the final 21-day period for a candidate to present a majority before new elections are called.

Polls in April also led to a stalemate in a political system reliant on coalition building.

Mr Gantz's task may have been further complicated by a flare-up between Israel and Islamic Jihad in the Gaza Strip last week, as his potential premiership likely rests on Arab support in parliament.

Mr Gantz has been desperately trying to convince Mr Lieberman, head of the nationalist Yisrael Beiteinu party, to join his coalition.

But even if he did they would fall short of a majority - needing at least the tacit support of the Arab Joint List, which has 13 seats, to govern.

The Arab parties would be unlikely to take ministries but could support a minority Gantz government in key votes in Israel's parliament, the Knesset.

But Mr Lieberman, a right winger known for his tough rhetoric towards Gaza, has reiterated his opposition to allying with Arabs.

The former nightclub bouncer has been a defiant kingmaker, with his eight parliamentary seats potentially enough to put Mr Netanyahu or Mr Gantz into power.

Mr Netanyahu, facing losing office for the first time since 2009, has upped his anti-Arab rhetoric in a seeming bid to increase pressure on Lieberman.

On Sunday, he warned the political community of a "dangerous government" backed by parties that "support terrorist organisations".

Mr Gantz, Mr Lieberman and Mr Netanyahu all supported the Israeli assassination of an Islamic Jihad leader in Gaza that prompted last week's deadly flare-up, while the Joint List opposed it.

"The Arabs ... are not Zionists and do not support Israel. To be dependent on them all the time, especially at the present time, is an enormous danger to Israel," Netanyahu said.

Israeli Arabs are the descendants of Palestinians who remained on their land when Israel was created in 1948 and constitute nearly a fifth of the country's population.

They have full legal rights but complain of discrimination and incitement against them in the predominantly Jewish country.

A range of scenarios remain and are likely to be played out in frantic negotiations behind closed doors.

Lieberman could ultimately backtrack and cut a deal with Netanyahu, or he could throw his weight behind Mr Gantz and form a minority government.

"Does Mr Gantz himself want to lead such a government? The answer is no," a columnist in Haaretz newspaper said Monday.

Lieberman, it added, "certainly doesn't want any form of partnership with (the Arabs). But does he have a better option?"

If Mr Gantz is unable to cut a deal by Wednesday, lawmakers have 21 days to propose a candidate capable of forming a majority to the president.

There is also a joker in the pack: Attorney General Avichai Mandelblit is due to decide by December whether to charge Netanyahu over corruption allegations he denies.

An indictment might permanently damage Mr Netanyahu's support, whereas a reprieve could give him a new lease of life.

If the 21 days pass without a breakthrough, a third election becomes inevitable.