Deal means coalition will no longer be dependent on narrow vested interests and will keep hawkish defence minister in place
A deal struck in the middle of the night to bring Israel's main opposition party into Binyamin Netanyahu's coalition government and cancel elections called just hours earlier for September is the biggest political drama in the Jewish state for decades.
In a shock move that vastly strengthens the prime minister's position by lessening the political leverage of his other coalition partners, Netanyahu announced that Kadima was joining a "national unity" government following secret talks.
It came just hours after an initial vote to dissolve the Israeli parliament, the Knesset, and Netanyahu's confirmation that elections would be held on 4 September. The 2.30am announcement of the new coalition deal rendered the earlier moves, which followed more than a week of political build-up, a farce.
Shaul Mofaz, the recently-elected leader of Kadima who will become a deputy prime minister in the government, has reportedly pledged allegiance to the coalition until October 2013, the scheduled date for elections.
But his U-turn may damage his already weak credibility with the Israeli public. Just before being elected as Kadima's leader, replacing Tzipi Livni, in March, he said in an interview: "Kadima under my leadership will remain in opposition. The current government represents all that is wrong with Israel, I believe. Why should we join it?"
In return for Mofaz's support, Netanyahu will back his proposals for reform of the unpopular "Tal Law", which exempts ultra-orthodox Jews from compulsory military service, and will introduce electoral reform – both important planks of Kadima policy. Even so, "Netanyahu has bought Mofaz at a ridiculously low price," said one analyst.
Meanwhile Mofaz has secured his short-term political future. Kadima was facing a drubbing in a September election, with polls predicting the party gaining 13 seats compared with its current position as the biggest party in the Knesset, with 28 seats. He was seriously alarmed at the prospect of early elections. And, for many politicians, power has a greater pull than principle.
With the inclusion of Kadima, the coalition will comprise 94 out of 120 Knesset members. Its breadth will make it much harder for parties‚ including the extreme rightwing Yisrael Beitenu led by Avigdor Lieberman and the small religious factions‚ to exercise political leverage.
"This is a major shift in Israeli politics," said Amit Segal, Channel 2's political correspondent. "It is no longer a rightwing coalition." He said that, from now on, Netanyahu would not be dependent on any party or vested interest.
The deal was greeted with fury by the parties remaining outside the coalition, now robbed of the chance of increasing their numbers in September. Shelly Yacimovich, leader of the resurgent Labour party, which was predicted to increase its parliamentary seats from eight to 17, called the deal "an alliance of cowards". It was "the most ridiculous and ludicrous zigzag in Israeli political history".
The former television personality and rising political star Yair Lapid, whose new party Yesh Atid was expected to win around 12 seats, said the deal smacked of "old politics, corrupt and ugly … This disgusting political alliance will bury all of its members beneath itself."
The deal centred around domestic issues, which were expected to play heavily in the election campaign. But the realignment could have significant repercussions for the major international issues: Iran and the Israeli-Palestinian "peace process".
Kadima is opposed to an Israeli military strike on Iran's nuclear programme. And Mofaz will now have a voice and a vote in the government's inner cabinet, which decides major issues.
But his entry into the coalition also secures the position of defence minister Ehud Barak, an arch-hawk on Iran. Barak had been facing the possibility of not being re-elected to the Knesset in a September election, with his Independence party failing to make its mark in the polls. There had been talk of Netanyahu offering his cohort a place on the Likud list – but this would have been vigorously opposed by the powerful pro-settler faction within the party, which loathes Barak.
Now the dilemma has vanished. Barak stays in place for another 18 months, giving him and Netanyahu ample time to execute a strike on Iran should they deem it necessary.
National unity governments have usually been formed in Israel in times of crisis – "mainly under conditions of war", said Segal. "Many people will raise the question of whether Netanyahu, Barak and Mofaz have agreed on something much more significant than electoral reform or the enlistment of the ultra-orthodox."
The agreement between Netanyahu and Mofaz stated that the national unity government would seek to re-establish negotiations with the Palestinians. Its significance should not be over-stated: this is already Netanyahu's formal position, but one that he shows no sign of seriously pursuing.
If he does have a Damascene moment, the inclusion of Kadima in his coalition will give him political cover against the expected onslaught from the extreme right. But the outcome of another election – the US presidential poll – is likely to have greater impact on the "peace process" than Mofaz's influence on Israel's new unity government.