What’s happened: Politics: Former prime ministers Naftali Bennett and Yair Lapid will run together in the upcoming elections under a new united political party. On Sunday evening they announced the new list named “Together, Led by Bennett.”

• Bennett said, “I am taking the most Zionist and most patriotic step we have ever taken, for our country… Our unity sends a message to all the people of Israel: the era of division is over. The era of repair has arrived.”
• He re-committed to his three pledges:
  • “On the first day of the new government under my leadership, we will establish a state commission of inquiry into the October 7 massacre to bring truth to the families and answers to all the people of Israel,”
  • Initiate a universal conscription law, and stop funding ultra-Orthodox draft evasion.
  • Introduce the term limit of a prime minister to eight years.
• Bennett added that he will:
  • “Safeguard the lands of our country and will not hand over a single centimetre to the enemy,”
  • Work to “strengthen an inclusive, welcoming Judaism without coercion.”
  • Bennett also said that a government led by him would advance same-sex marriage, along with civil marriage. The current status quo is under exclusive domain of respective religious authorities.
• Lapid explained his thinking behind the move, “The State of Israel needs to change direction. This is a test of our leadership, and we will meet it. What you have seen today is the first step. We are here because this country needs unity like air to breathe. We are here for everyone who believes in democracy, believes in the deep Jewish foundation of the country, believes in the values of Zionism and our right to this land.”
• In his view, “to win the elections, the entire Israeli centre must stand behind Naftali Bennett. Bennett is a clear right-winger, but he is a liberal, decent, law-abiding right-winger who did not sell his values – neither to Haredi extortion nor to corruption – he was an excellent prime minister, and he will be an excellent prime minister. This is what we need now.”

Context: Whilst no real surprise, the move cements the opposition bloc under Bennett’s leadership.

• Lapid and Bennett first formed a political friendship and alliance when they both joined Netanyahu’s third government in 2013, and doing so blocked the entry of the ultra-Orthodox parties. That government survived less than two years after Netanyahu sacked Lapid as his finance minister. Since 2015 every Netanyahu government has included the ultra-Orthodox parties.
• The only break in the Netanyahu monopoly was the brief 2021-22 broad coalition government that saw Bennett and Lapid serve as (short-lived) rotating prime ministers. There is no suggestion that rotation is on the agenda this time.
• Bennett and Lapid’s broad coalition was the first in Israel’s history to include an Arab party, with the Islamic Raam Party and its leader Mansour Abbas part of the coalition.
• The timing of the announcement, amid a fragile ceasefire and in the week following Israel’s Independence Day, also symbolises the first significant consolidation ahead of the election that must be held within six months, and must be announced in the next three months.
• One of remaining issues to be determined is whether Gadi Eisenkot, who had initially recommended the three of them unite, will also join them. Both Bennett and Lapid are on good personal terms with Eisenkot, and the possibility remains open for him to join them at some point.            
• Eisenkot who formed his Yashar party after serving as Benny Gantz’s deputy welcomed Bennett and Lapid’s decision to unite, saying that he had spoken to Bennett on the phone half an hour before the announcement. He said, “I see Naftali Bennett and Yair Lapid as partners and will continue to do, with responsibility and wisdom, what is right to achieve the victory and the change needed for the State of Israel.”
• The move was also welcomed by other members of the anti-Netanyahu bloc.  
• However the decision came under fierce criticism by the Likud and the right-wing parties accusing them of once more preparing to form a coalition with Raam, and by extension with the Muslim Brotherhood. Whist technically accurate, Mansour Abbas the leader of Raam is also seen as brave moderate leader, who in the past has acknowledged his place as a Muslim minority in the Jewish State.    
• There is a general feeling in Israeli society that after the trauma of October 7 and the ensuing 2.5 years of war, the possibility of Jewish-Arab political cooperation – as represented in the previous Bennett-Lapid government of which Mansour Abbas was a member – has been weakened.
• In a press conference in June 2024, Lapid said that “I have explained and we studied and I think that Mansour Abbas has also understood this, that they can’t be the 61st coalition member. It is impossible to establish a government that is dependent on them, without Israeli society and also Arab society not being able to deal with that. The Jewish and the Arab public are not ripe for a government in which the Arab parties will be the deciding voice.”
• The polling has remained relatively static for some time, with Bennett’s party neck and neck with the Likud around mid-20 seats. It is Eisenkot’s party that has some momentum polling in the mid- teens, at the expense of Lapid’s Yesh Atid that has fallen into single digits.
• The other advantage Bennett received by uniting with Lapid is significant financial backing. Although trailing in the polls, Yesh Atid is still the second largest party in the current Knesset and will therefore receive a substantial proportion of the state funding for the upcoming campaign.
• It remains unclear how the merger will affect the opposition bloc’s overall success, but the other opposition parties are all confident they represent a specific sector, so Yair Golan’s Democrat Party are the representatives of the Israeli left, having combined the Labour and Meretz parties, (with their separate runs in the 2022 elections seen as an error). Meanwhile Avigdor Lieberman’s Yisrael Beteinu, with a right-wing but anti ultra-Orthodox sentiment has the sectoral backing of Russian-speaking immigrants. It is expected that the three or four competing Arab parties will also reunite their Joint List, that could increase their electoral power significantly.

Looking ahead: The election is scheduled for no later than October, and a formal 90 day campaign beforehand will begin after the Knesset has been dissolved.

What’s happened: This morning a memorial siren sounded across Israel in honour of Holocaust Remembrance Day.

• The traditional opening ceremony at Yad Vashem in Jerusalem on Monday evening was this year prerecorded and was held without any audience because of the ongoing security situation.
• In his speech President Herzog noted, “There are those who seek to destroy this home that we built, even today. For two and a half years, the State of Israel has been at war, since that frightful day, the October 7th massacre. In every place and every site I visit, I see Israeli society and the spirit that animates it. Across the length and breadth of the land, in bomb shelters, at sites destroyed by missile attacks, in hospitals, in command centres, and volunteer hubs, I see the solidarity, the heroism, the devotion, and the mutual responsibility.”
• He used the opportunity to call for national unity, saying, “History has repeatedly taught us the high price of internal fighting and division and, alternatively, the strength of mutual responsibility and fraternity. Based on that memory, based on everything that our people has endured, we must say to ourselves, especially today: We did not rise from the fire of the crematoria only to burn in the fire of quarrel.”
• Prime Minister Netanyahu said in his speech that the establishment of the State of Israel may not have ended antisemitism and belligerence against the Jewish people but, as opposed to the past, the people who seek to destroy us bring destruction down upon themselves.
• Netanyahu said, “This year we will remember that the State of Israel is at its all-time peak in strength. Who could have imagined 80 years ago that our bold air force pilots and the American military’s pilots would defend, wing-to-wing, the Middle East, Israel and the United States of course, to defend civilization from barbarism.”  
• As in previous speeches, Netanyahu connected the memory of the Holocaust to the Iranian threat. Netanyahu said, “Indeed, we have destroyed large parts of the industry of death that the Iranian regime had developed over decades: the nuclear plants, missiles, UAVs, the naval fleet, the air force, and vast quantities of other weapons systems. Had we not acted, the names Natanz, Fordow, Isfahan and Parchin might have been remembered eternally in infamy, just like Auschwitz, Treblinka, Majdanek, and Sobibor. But we acted, and how—in an unprecedented historic partnership with President Trump and the United States.”
• Netanyahu also criticised Europe, which he said “has forgotten so much since the Holocaust, can learn many things from us, primarily: the sharp distinction between good and evil, which, in the moment of truth, requires us to go to war for the sake of good, for the sake of life. Europe, which vowed after World War II to defend the good, is infested today with a deep moral weakness. Europe is losing control over its identity, its values and its commitment to protect civilisation from barbarism.”

Context: Israel formally designated “Holocaust and Heroism Remembrance Day,” on the Hebrew date of 27 Nisan in 1951, after the Knesset debated several options.

• The date chosen is a week after Passover, close to the anniversary of the Warsaw Ghetto Uprising, which began on Passover. For the then young State of Israel the main driver was to connect remembrance of the Holocaust with Jewish resistance. Whereas International Holocaust Remembrance Day on January 27 marks the anniversary of the liberation of Auschwitz-Birkenau.
• This year there are 116,880 Holocaust survivors still alive and living in Israel. Just over 13,000 survivors died in the last year. There were 115 Holocaust survivors who were among the thousands evacuated from their homes as a result of the latest Iran war.            
• In Israel, the memorial is also an opportunity to reflect on growing antisemitism around the world. There have been over 1,000 antisemitic incidents around the world in the last year, resulting in 20 Jews killed, 15 of whom  in the terror attack on Bondi Beach. This figure reflects a 30 year high.

Looking ahead: Direct talks between the ambassadors of Israel and Lebanon are due to begin later today in Washington.

• In parallel, the operation Bint Jbeil is expected to continue for a few more days.
• Next Tuesday Israel will mark Memorial Day for those fallen in wars and terror attacks, and the following day celebrate Israel’s 78th Independence Day.

What’s happened: The Knesset passed the Death Penalty for Terrorists bill into law last night, codifying into law what had been for years a slogan of the far-right. Opposition party Yisrael Beiteinu, an early pioneer of the slogan that even in its days as part of a coalition never seriously advanced the proposal, supported the bill. United Torah Judaism, an ultra-orthodox party inside the coalition, opposed it.

• The law has drawn the ire of liberals in Israel and nearly all of Israel’s allies. It calls for a mandatory death penalty for those convicted of terrorist murder of Israelis.
• The law is not expected to survive challenge in the Israeli Supreme Court, though as the legislation itself is largely understood to be populistic rabble-rousing, this may be the point.
• Among its many weaknesses before judicial review: the distinctions it makes between crimes in the West Bank and inside Israel, the mandatory nature of the penalty (rather than execution being a maximum sentence), and the very fact of bringing a form of civilian law into the West Bank that isn’t limited only to Israeli citizens.
• Nearly every professional body in Israel opposed the legislation. The National Security Council, a body inside the Prime Minister’s Office, warned that aspects of it contradicted international law. The Ministry of Foreign Affairs warned that it could put Israel in violation of treaty commitments.  Justice Ministry officials have also noted problematic the application of civilian legislation in the West Bank to non-Israelis (since 1967, an emergency order has allowed Israeli legislation to apply to Israeli settlers living in the West Bank, but the Knesset has largely refrained from legislation that directly applies to the Palestinians).
• As a result, it is highly likely that the Supreme Court will determine that this new law is illegal, which would only add to the ongoing tension between the current government and the court.      
• Itamar Ben-Gvir, the politician most associated with the bill, was seen in Knesset opening champagne to celebrate the bill’s passage, an image that rankled many in Israel not just for its poor taste and bad decorum, but also because it later emerged that at the time that was going on, senior officials already knew what the public did not yet know, namely that four IDF soldiers had been killed in combat.

What’s happened: The budget deadline is perhaps the most urgent economic issue connected to the war in Iran, but it is far from the only one, or even the most significant.

• Fighting the war — on multiple fronts — is itself very expensive. Writing in Yediot Ahronot, Sever Plocker estimates, using figures from the Twelve Day War last year, that direct war expenditures can amount to 60 billion shekels per month. The loss of output from the partial shutdown of the economy amounts to some 30 billion shekels. Taken together with the costs of recovery and reconstruction from war damage, the war’s direct costs easily top 100 billion shekels (almost £25 billion) for each month that it rages.
• Direct costs to the US are enormous in absolute terms ($11 billion dollars so far, according to an estimate in this morning’s New York Times), but unlike in Israel, negligible as a portion of total economic output.
• The war threatens to impact the global economy too in ways which will affect Israel as well. Energy market disruptions could send the global economy into a recession, while a spike in energy prices could set in motion price inflation.
• On the budget itself, the cabinet met Wednesday on Zoom and agreed to add 28 billion shekels to the 2026 defence budget. The deficit target was raised to 5.1% from 3.9%.
• The budget also included a large amount set aside to “coalition funds,” the local euphemism for direct earmarks for the Haredi sector and West Bank settlers. This was already in the vicinity of 5 billion shekels and in the new budget approaches 6 billion. Israeli commentators speculated that this is what made possible the agreement of the Ultra-orthodox parties to vote for the budget despite not getting the conscription law, which had been their principal legislative priority for this Parliament.
• Opposition MK Gilad Kariv of the Democrats described the budget as a “looting budget,” because it was, in his words, “the seizure of property and money in wartime.”

What’s happened: The coalition survived a budget vote in Parliament yesterday when a first reading of the 2026 budget passed by a 62 to 55 majority.

• The ultra-Orthodox parties had threatened to boycott the vote and had, until yesterday, refused to support the budget without  securing a new bill on draft exemptions for the ultra-Orthodox public first.
• The three ultra-Orthodox parties are the Sephardic Shas party, as well as the two Ashkenazi ultra-Orthodox parties, Degel Ha-Torah and Agudat Yisrael, which together run on a joint list known as United Torah Judaism (UTJ). Agudat Yisrael is the party of the Hasidic community and Degel Ha-Torah of the non-Hasidic Ashkenazi Haredi community, known informally as ‘Lithuanians.’
• A vote scheduled for earlier this week had to be scuttled once it became clear that the coalition did not have a majority. Wednesday’s vote was made possible by Degel Ha-Torah’s decision to support the budget even without a final agreement on the conscription bill. Shas followed suit (though its leader Aryeh Deri was absent at the vote), but Agudat Yisrael did not vote with the coalition.
• The chairman of Agudat Yisrael Yitzchak Goldknopf tied his party’s decision to abstain from the vote to his dissatisfaction with the steps taken against ultra-Orthodox draft-dodgers in the absence of a new law exempting them from service. “We cannot stand by,” he said in the Knesset debate. “This government will be remembered as the one who puts young men behind bars.”
• Finance Minister Bezalel Smotrich hailed the new budget and the performance of the Israeli economy in general. “After two years of a costly war, the State of Israel is a powerhouse of strength,” he told members at the opening of yesterday’s parliamentary debate. “We predict a 5.2 percent growth in GDP in the coming year. Inflation is returning to the target range, between 2% and 2.5%, we are curbing the cost of living and preserving the value of the money of Israeli citizens.”
• Opposition MK’s slammed the budget, with Yair Lapid describing it is as “unhinged” and another member of his party criticising in particular the record-breaking 7.5 billion-shekel allocation of “coalition funds,” the Israeli euphemism for direct political earmarks which mostly benefit the ultra-Orthodox community and West Bank settlers.

Context: Passing a first reading was a major hurdle for the 2026 budget and for the governing coalition in general. By law the Finance Committee is assigned 60 days to review the budget between the first and second reading. If the Knesset cannot pass a budget in its final form by March 31, parliament is automatically dissolved and new elections are scheduled within two months. In this year’s case, that would be only a minor drama as elections are currently scheduled for no later than October of this year.

• When no budget is in effect, the state operates by the so-called “one twelfth rule,” whereby all outlays from the last agreed budget are maintained on a month-to-month basis until a new budget is passed. In 2020, Israel operated on such a continuation budget for the entire fiscal year.
• The current budget proposal projects 812 billion shekels (about £190 billion) in expenditures, of which 112 billion shekels (about £26 billion) is slated for defence. There will be an operating deficit of about 3.9% of GDP, significantly lower then the figures for 2025 (4.7%), 2024 (6.8%), and 2023 (4.2%), but still much higher than the operating deficit during 2002, the last full year before the war in Gaza broke out, when it stood at 1.9% of GDP. In 2020, the year of the pandemic, the deficit was a staggering 11.4% of GDP.
• The political drama in the lead-up to the budget vote had little to do with the actual budget and more to do with the contentious efforts by the government to come up with a compromise on ultra-orthodox draft exemptions. Though no final compromise was reached, negotiations with the Chair of the Foreign and Defence Committee and the Committee’s legal counsel on a few controversial passages in the text of a draft form of that bill reached a breakthrough on Tuesday. 
• The current version of the conscription bill would grant a blanket exemption for full-time yeshiva students and set modest targets for drafting ultra-Orthodox men who are not enrolled in full-time study. There are currently 80,000 military-age ultra-Orthodox men who have avoided entirely national service. The IDF says it needs at 12,000 to meet its current manpower shortage.
• The version of the bill currently being advanced would ostensibly force a number close to that (but still smaller) to enlist, however, as critics point out, many of the legal sanctions for evading the draft, such as a cut in daycare subsidies for fathers who avoid mandatory services, would become dead letters, almost guaranteeing no real enforcement of the draft requirement. The bill would also end legal sanctions against those who dodged the draft in the year leading up to the bill as well. In its current form, it is likely to be challenged in court — and overturned.
• The Committee’s legal counsel had earlier blocked text that the coalition MK’s favoured with the warning that in its current form, the law would easily be struck down by the Supreme Court as violating the equality provisions of Israel’s quasi-constitutional Basic Laws. The exact phrasing of the new compromise solution is not yet known, but is widely expected to be struck down anyway on similar grounds.
• Historically in Israel, coalitions are fractious with different factions functioning at cross purposes with each other. The current narrow, right-wing, coalition in power since the election of 2022 has been unusually solid and stable, with few major areas of disagreement despite being remarkably unpopular in public opinion polls since its first months in power. The issue of draft exemptions for the ultra-Orthodox public has been one of the only issue that has emerged as a major point of contention inside the otherwise relatively united coalition.

Looking ahead: Following the successful vote last night, the budget bill moves back to the Knesset Finance Committee. It will need to pass a second and third reading in the plenum to become law.

• Even with a budget, the coalition will still need to conjure a compromise on the conscription bill to stay in power to the end of this parliament’s term. For that compromise to have any legal validity it will have to involve language that does not invite intervention from the Supreme Court invalidating the law entirely. Neither of these events — and certainly not both — appear likely at this time.

What’s happened: An explosive interview by a former spokesperson for Prime Minister Netanyahu regarding the leaking of classified documents, dominated headlines in Israel and ignited reactions on all sides of the political divide.

• Eli Feldstein, a former spokesperson for Netanyahu and a suspect in two ongoing criminal investigations into national security breaches in the Prime Minister’s Office, spoke at length on the programme Yihye Tov on the public broadcaster Kan. The interview was split into three parts, with the first two broadcast over the last two nights and the third due to be broadcast tonight.
• The interview on Kan as well as an investigative report on the Hebrew i24 network sparked renewed interest in two overlapping scandals: the leaked classified documents and the Qatari influence campaign in the Prime Minister’s Office. Feldstein is connected to the ongoing investigation into both.
• In the parts already broadcast, Feldstein confirms that the leak of classified information to the German newspaper Bild in September 2024 was done to influence Israeli public opinion and reduce pressure on the Prime Minister on the hostage issue. In the second part of the interview, broadcast last night, Feldstein alleges that Netanyahu knew of the leak beforehand and approved of it afterward.
• He does not offer any specific proof of Netanyahu’s alleged knowledge of the leak beforehand, in contrast to the very specific details he does provide about Netanyahu’s alleged subsequent approval  as well as the Prime Minister’s alleged direct involvement in an effort to plant a question at a press conference after the leak which would allow Netanyahu to insinuate in his answer that the IDF had deliberately hiding the information in the leaked document from him.
• In the first part of the interview, broadcast two nights ago, Feldstein paints  a picture of Netanyahu focused on crafting a media strategy that would absolve him of “responsibility” for the October 7 massacre.
• The Prime Minister’s Office denounced Feldstein’s statements as “a long series of false and recycled allegations” from someone with personal motives trying to deflect responsibility from himself.

Context: The revelations of the last 48 hours concern two separate scandals, with overlapping involvement from three key figures close to the Prime Minister.

• The first scandal, which was the focus of most of the interview that was broadcast on the Kan public broadcaster, concerns the unauthorised handling of classified documents, allegedly in an attempt to influence domestic Israeli public opinion.
• The alleged actions occurred in the days immediately following the murder of six Israeli hostages in a Gaza tunnel. On August 31, 2024, IDF forces discovered the bodies of six hostages who had been executed by their captors one or two days before. The hostages had survived eleven months of captivity, abuse, and deliberate starvation since their abduction by Hamas on October 7, 2023.
• When the Hamas terrorists detected an Israeli forces operating nearby, they chose to murder the hostages to ensure that they would not be rescued, as had happened only a few days earlier with the Israeli Bedouin hostage Qaid Farhan al-Qadi. The discovery of the bodies sparked outrage in Israel leading to the largest demonstrations at any point in the two years of the war, with estimates of over 500,000 people assembled at various protest sites on September 1 as well as a general strike.
• It was in this context that the Prime Minister’s spokesperson Eli Feldstein leaked a classified intelligence assessment from months earlier that speculated that Hamas was using the hostage issue to manipulate the Israeli public and divide it.
• According to Feldstein, the documents were deliberately leaked to a non-Israeli media outlet not subject to Israeli censorship because no Israeli outlet would have been able to legally reveal classified information that had not been cleared for publication.
• The leak, and subsequent reporting about the leak, took the wind out of the sails of the protest movement, and the pressure on the Prime Minister to reach a hostage deal rapidly abated after the initial burst of anger over the murdered six hostages.
• Feldstein himself was not authorised to see the classified documents in question. He was also not directly employed by the Prime Minster’s Office, as he had not been granted the necessary security clearance. His salary was not paid for by the PMO, but rather through a complicated arrangement where money was transferred to him allegedly from an American lobbyist with connections to Qatar. In the interview, Feldstein claimed he did not know about the Qatari connection at the time.
• The second, overlapping, scandal concerns an alleged Qatari influence campaign in the Prime Minister’s Office, involving Feldstein himself and two other figures considered very close to Netanyahu, his aide Jonatan Urich and the lobbyist Yisrael (“Srulik”) Einhorn.
• Feldstein spoke very little about the Qatar affair in the first two parts of the interview. The third part will be broadcast tonight. 
• At the same time, an investigative report on the Hebrew i24 channel, normally seen as broadly sympathetic to Netanyahu, revealed a close coordination between Urich and Einhorn to release statements to the Israeli press, ostensibly reflecting the views of senior security officials, which tallied with Qatari priorities and very often disparaged Egyptian role in the hostage negotiations. Einhorn’s PR firm had earlier received payment from Qatar to promote the country’s image in the lead up to the 2022 World Cup.

Reactions: Most politicians and media figures aligned with the governing coalition denounced Feldstein and defended Netanyahu, with the exception of Minister Amichai Chikli (Likud) who said that there was “no way to defend what was revealed” and called for an investigation into the Qatar affair.

• Those opposed to Netanyahu were scathing in their criticism. Former Prime Minister Naftali Bennett said that “Netanyahu’s office betrayed the State of Israel and IDF soldiers during wartime and acted on behalf of Qatar for financial gain, and Netanyahu himself is covering it up…Whether Netanyahu knew or did not know that his office was working for the enemy in time of war, both possibilities require his immediate resignation.” In other media appearance, Bennett repeatedly used words like “treason” and “betrayal” to describe the alleged actions of the Prime Minister and some of his closest advisers.
• Gadi Eisenkot, chair of the new Yashar party, and briefly a minister in Netanyahu’s expanded war cabinet, said that “while the country was shaking with anger and pain over the murder of our six hostages in the tunnels, while the Israeli people went into the streets heartbroken—the prime minister wasn’t engaged in getting the rest of the hostages back, but rather in psychological warfare against his own citizens. He waged a psychological campaign that was designed to poison the public and to silence the families’ outcry.

Looking ahead: Israel is due to hold a general election by 27 October 2026. However, the election could be brought forward due to difficulties surrounding the budget and legislation on Haredi draft exemptions. There are also rumours circulating that Netanyahu will dismantle his government and will call an early election.

• Prime Minister Benjamin Netanyahu’s party, Likud, is leading in the polls, but his governing coalition is projected to fall short of an overall majority.
• In parallel, Prime Minister Netanyahu continues to appear in court facing trial on corruption charges. At the end of November, he requested a pardon from President Isaac Herzog, which is currently under consideration.