Prime Minister Benjamin Netanyahu made a significant step towards cementing his fourth government after reaching a coalition agreement with two key parties Wednesday.
Netanyahu has spent the last month and a half courting the centrist Kulanu party – led by former Likud minister Moshe Kahlon – and the ultra-Orthodox United Torah Judaism party; but talks had faltered amid mutual demands for control over key economic positions and over key issues.
However, late Tuesday night, a breakthrough was reached with Kahlon, and Netanyahu secured the support of the man everyone thought would be this election's kingmaker.
Meanwhile, talks with the haredi party also bore fruit, and thus both parties will sign their collation agreement Wednesday afternoon, making them the first to join the budding coalition.
Netanyahu, who won big during the March election, gaining a whopping 30 Knesset seats, has now secured an additional 10 Knesset seats from Kulanu and another 6 from UTJ, placing him at 46 Knesset seats.
Though at least 15 seats shy of the minimum 61-seat majority needed to form a new government, the two deals leave Netanyahu well-poised to leverage Israel's rightwing Bayit Yehudi (8) and Yisrael Beytenu (6) parties to form a government with him.
The social-oriented religious party Shas (7) is also in Netanyahu's political crosshairs and has been promised a number of key portfolios.
Should he secure the support of two of the three, he will be in a position to form the next government and at least squeeze compromises from the third, thus gaining a relatively stable 67-seat strong right wing coalition.
Price of haredi support: Stipends, conversions and IDF enlistment
After weeks of on-and-off negotiations, Netanyahu reached a deal with UTJ by agreeing to a freeze in a string of reforms led by the previous government that cut down on economic benefits to ultra-Orthodox Israelis.
Netanyahu further agreed to alter the reform in Israel's conversion laws – a contentious topic for the ultra-Orthodox on the one hand, and secular and Russian Israelis on the other – vowing to harden criteria that the previous government had loosened by giving local municipal rabbis power at the expense of the central rabbinate.
Most importantly, Netanyahu agreed to alter – maybe drastically – one of the past government's largest achievements: A universal enlistment law that would for the first time see haredis drafted into the IDF. The issue was a deal breaker for the haredi party and it seems they have gotten their way.
Yair Lapid, who heads the Yesh Atid party that sponsored the enlistment law, blasted the news, calling it a "fire sale of Israeli society."
The haredim will sign their coalition agreement with Netanyahu in the early afternoon, pending final authorization from the council of rabbis that govern the party.
Finance Ministry to Kulanu
After finalizing the deal with haredim, a breakthrough was reached with Kulanu and the final clauses of their coalition agreement were drafted.
As promised, Kahlon himself will serve as Israel's next finance minister, while his party will receive the Housing and Construction Ministry and the Environmental Protection Ministry.
They will also receive control of the Israel Land Administration and the Central Planning Committee that Netanyahu removed from the Interior Ministry – which was tentatively promised to Shas, hitherto preventing the deal with Kulanu.
A representative from the Kulanu party will also head the Knesset's Labor and Welfare committee and Kahlon's party maintained the right to vote against government lines on a number of bills which will curtail Israel's Supreme Court.
The two further agreed that the two-year budget Kahlon had been working on in recent months will be voted into law by autumn.
Next in line: Shas and the Bayit Yehudi
Despite the fact that Shas, Bayit Yehudi and Yisrael Beytenu will most likely join the government, some details remain as tensions between the different parties prevent the right wing coalition from coming together.
The Religious Services Ministry, which was promised to Shas, has yet to be formally given to the party because of objections by Naftali Bennett – who heads Bayit Yehudi and held the portfolio himself in the previous government.
Shas is ultra-Orthodox in its religious affiliation, while Bennett and his party is Religious-Zionist; moreover, the former is predominantly Sephardic while the latter is Ashkenazi, adding ethnic and religious tensions to the political debate.
The disagreement has further been exacerbated by Shas leader Aryeh Deri's promise not to join any government that does not accept his demand for 0% VAT on basic food products, like some fruits and vegetables.
Sources within Shas say that Deri will be given the Interior Ministry and will demand another portfolio – probably the Welfare Ministry. The possibility of the now Bennett-run Economics Ministry was also said to be in the cards.
Bennett for his part is slated to receive the Education Ministry as well as two other portfolios. He is also demanding that the government move forward with the anti-court laws Kahlon objected to. Bennett is also demanding a commitment that during the government's term, no freeze in settlement construction will be implemented.
Bennett and Netanyahu are set to meet Wednesday night.