What does Netanyahu’s ‘masterstroke’ mean for Israel and the Middle East?

Once again Israel has caught the world off-guard, this time by announcing the creation of a new national unity government, which incorporates the leading opposition party and the centrist Kadima headed by its new leader, former Defense Minister Shaul Mofaz. Previous national unity governments were formed prior to the 1967 war and in 1984 in response to Israel’s economic crisis. The new coalition indicates the depth of the multi-faceted crisis in which the Jewish state currently finds itself. Prime Minister Benjamin Netanyahu’s government confronts difficult choices across a wide range of issues, ranging from decisions regarding an attack on Iran, middle class unrest regarding the country’s increasingly unbalanced economy, social tensions over the power of the ultra-Orthodox Haredim, and the future of a peace process that seems ever more remote.

Netanyahu had dropped the broadest of hints that a new election was in the offing; most observers expected an announcement that the election would be held on September 4, before the Jewish high holidays, and, significantly, two months before the American elections. With Netanyahu widely expected to return as prime minister, it appeared that he would be in an even stronger position to threaten a strike on Iran if the international community appeared unable to prevent Tehran from moving ahead with its program to develop a nuclear weapon. By adding Kadima’s 28 seats to those of his own coalition, giving him 92 seats out of 120 in the Knesset (parliament), Netanyahu was able to strengthen his hand domestically without having to go to the polls for another year.

Kadima’s return to office — Ehud Olmert, Netanyahu’s predecessor, was Kadima’s leader, as was Prime Minister Ariel Sharon, the party’s founder — will certainly affect any decision by Israel to attack Iran. Mofaz, who was born in Tehran, is known to be opposed to a unilateral strike; as a former chief of staff, his opinion will carry some weight in the government’s security cabinet. On the other hand, should he become convinced that Israel has no other option but to strike the Iranian nuclear facilities, his support would solidify Netanyahu’s decision, both internally and externally.

Mofaz and Kadima bring more to Netanyahu than possible support for an attack on Iran, however. Kadima has been far more forthcoming on making some progress in the peace process with the Palestinians. Significantly, Mahmoud Abbas welcomed the creation of the new government. Kadima’s participation in the government allows Netanyahu to sidestep the more extreme elements of his own Likud party, and particularly those with close ties to the settler movement. The risk he runs, however, is that he could be abandoned by his party, as has been the case with Ehud Barak, or become a Ramsay MacDonald-type hostage to Kadima. Still, Netanyahu appears to be solidly in charge of Likud; the settlers may fuss and fume, but their clout may be less than meets the eye.

Kadima will certainly help Netanyahu in the economic and social realms. The "start-up nation" increasingly resembles a banana republic: The percentage of the population below the poverty line has increased in the past few years. Middle-class discontent over housing costs and the price of basic foods, could erupt once again, and the tent cities of a few months ago could result in a backlash against Likud. Kadima, on the other hand, is seen as sympathetic to middle-class needs, and likely will provide a vehicle for Netanyahu to be more accommodating to the middle class than might otherwise have been the case.

Finally, with the Israeli supreme court ruling that military exemptions for the Haredim are unconstitutional, the entry of the secular Kadima party into the government allows Netanyahu to outmaneuver the religious parties, who will no longer have a stranglehold on the government. The ultra-orthodox religious establishment, and the parties that represent it, will howl in protest at any attempt to remove the exemptions from military and national service that now apply to over 60,000 students in religious seminaries. On the other hand, popular opinion in Israel (and, for that matter, among its Jewish supporters overseas) overwhelmingly opposes more than a limited percentage of exemptions for the Haredim. Netanyahu and the unity government could now pursue a plan such as that which Defense Minister Ehud Barak has proposed: No more than roughly 3,000 places, or roughly five percent of the current population, would be reserved in the seminaries for the best and the brightest students. The remainder would either perform national service or serve in the military, after which they would enter the workforce, thereby injecting a real boost to the economy, while lowering the burden that subsidies for these students, and their often large families, force the government to bear.

Clearly, Netanyahu’s latest move is a masterstroke, politically as well as in terms of the nation’s security, its economy, and its social cohesion. In the past, national unity Governments have accomplished the mission for which they were established. If Netanyahu can do the same, particularly if Mofaz is able to restrain any Israeli impulse to attack Iran, this latest government will be able to take its place among its distinguished predecessors.