Israel's political crisis: what happens next?

With Benjamin Netanyahu and Benny Gantz both failing to form a government, the country could be heading for its third election in a year

Israel's Blue and White political alliance leader, retired General Benny Gantz, arrives to give a statement ahead of a midnight deadline in the coastal city of Tel Aviv. AFP 

Israel could be heading for a third election in less than a year as Benny Gantz failed to form a government by the Wednesday deadline, after Prime Minister Benjamin Netanyahu had also previously failed.

A 21-day period where Israeli politicians can nominate any one of the Knesset’s 120 members of parliament to try and establish a coalition has now begun.

If that fails too, an election will be triggered within 90 days, raising the prospect for a weary electorate of going back to the polls after inconclusive votes in April and September.

For Mr Netanyahu, not securing a fifth term as prime minister also has legal implications: Israel’s attorney-general announced on Thursday formal charges following for bribery, breach of trust and fraud after long-running police investigations.

Mr Netanyahu denies all wrongdoing, accusing his opponents of a witch-hunt. Under Israeli law a serving prime minister does not have to step down if charged.

Mr Gantz, a former general who heads the Blue and White party, has made much of Mr Netanyahu’s legal woes, portraying himself as a unifying centrist figure.

“In the past 28 days, I have left no stone unturned, irrespective of how small, in my attempt to form a government that would bring to the State of Israel leadership with integrity, morality and values,” he said on Wednesday night.

“We have made great efforts towards forming a broad, liberal unity government … a government that will serve everyone — religious and secular, Jews and Arabs.”

While they are largely aligned on national security, Mr Gantz has signalled more openness than Mr Netanyahu to a resumption of long-stalled peace talks with the Palestinians.

Mr Netanyahu has sought to cast Mr Gantz as a dovish novice who is not up to the task of running Israel’s economy and statecraft alone.

Mr Netanyahu issued a last-gasp appeal to Mr Gantz to compromise, telling rightist factions that, even among its closest allies, Israel was “becoming a joke” due to its political turmoil.

“For the sake of Israel’s security, for the sake of the will of the people, for the sake of reconciliation among the people, we indeed need to form a unity government.”

President Reuven Rivlin had proposed a “rotation” agreement between Mr Netanyahu and Mr Gantz in which the Likud leader would take a leave of absence as prime minister should he be indicted.

One potential kingmaker, Avigdor Lieberman, declined to back either Mr Netanyahu or Mr Gantz as the deadline neared.

Mr Lieberman, who heads the far-right Yisrael Beitenu party said on Wednesday that “both (Mr Netanyahu and Mr Gantz) were guilty” in failing to agree a Likud-Blue and White alliance, which he had strongly advocated.

With no unity government in sight, Mr Lieberman said, he would deny both men the support of his party’s eight legislators, effectively meaning that neither Mr Netanyahu nor Mr Gantz would have sufficient backing to get a working majority.

“As things stand now, we are on the way to another election,” Mr Lieberman said.

He reiterated opposition to a Mr Netanyahu-led government that included ultra-Orthodox Jewish parties with religious influence over life in Israel, and to an administration headed by Mr Gantz that, he said, would be dependent on support from Arab parties he described as a “fifth column”.

Ahmed Tibi, a senior politician from Israel’s 21 per cent Arab minority, tweeted that Lieberman’s rhetoric constituted “incitement” and “straight-up racism and anti-Semitism”.