Meanwhile, in a “surprising” turn of events, Israel will not hold early elections, but instead will be governed by a national unity coalition. What does this portend?
I suspect very little. Netanyahu called for new elections because he thought he would win – not win an overwhelming mandate (polls suggested Likud would gain a handful of seats) but win a commanding position in parliament (Labor would come in second with only half as many seats as Likud). He’d have to form a coalition after the election, though, and there are always uncertainties about what potential partners would demand. If he can get a stable coalition without an election, why not?
Mofaz, meanwhile, faced an election in which his party was projected to lose more than half its seats. He was not negotiating with Netanyahu on the basis of having the largest faction in the Knesset now. He was negotiating on the basis of having the third or fourth (or even fifth) largest faction after elections. That’s why he basically got nothing in exchange for joining the coalition.
A national unity government is a useful thing for avoiding accountability, which suggests that Netanyahu might be planning something that entails some political risk. But that could go either way – an interim accord with the Palestinian Authority, or a military strike against Iran would both fit the bill. And he might not have any such plans; he might just have gotten Kadima for what amounts to a song, so why take the risk of an election?
The important thing to realize is that the Netanyahu government is broadly popular in Israel, and to the extent that the electorate (or at least the Jewish portion of the electorate) is unhappy with it, they are unhappy about inflation, or about religious divisions, and not about his foreign policy or his policy towards the settlements. The major opposition parties all say that Israel should be making more progress on peace with the Palestinians – but they also all favor peace on Israeli terms. That doesn’t mean they wouldn’t go further if the opportunity presented itself. It means that no major party thinks it’s a winning electoral platform to advocate a meaningfully more conciliatory policy.