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What happened: Despite reports of progress on the 2021 state budget, the Likud and Blue and White continue to threaten new elections.

• Yesterday, during the reception ceremony at Ben-Gurion Airport for the FlyDubai plane that landed in Israel for the UAE airline’s first flight, Prime Minister Benjamin Netanyahu told reporters, “When agreements are not respected on the part of Blue & White, there is no doubt that we are on the way to elections.”
• Shortly after Netanyahu’s interview the Likud released a statement saying: “The prime minister believes that there is no reason to go to elections, but he said that if Blue and White continue to maintain a government within the government, they will drag Israel to elections by so doing.”
• Blue and White responded: “The person who has been breaking agreements, stalling appointments and preventing the state budget [from being passed] for political and personal reasons for months is Netanyahu. It is for good reason that in every poll, an overwhelming majority of the public blames Netanyahu for the predictable next round of elections — because that is the truth. If there were no trial — there would be a budget.”
• Also yesterday, Blue and White Minister Izhar Shay told Army Radio that “there is a good chance” his party will vote in favour of the no-confidence bill that Yesh Atid leader Yair Lapid is expected to bring to the Knesset next week. Shay was the second Blue and White minister this week, after Culture Minister Chili Tropper, to suggest that the party was considering voting in favour of disbanding the parliament.

Context: Whilst Netanyahu and Gantz say they do not want new elections, they are both in campaign mode exchanging messages over the question of who would be to blame for the breakup of the government.

• The prospects of new elections centres on the disagreement between both parties over the state budget, which must be approved before the 23 December deadline – unless both sides agree on another extension. Earlier this week it was reported that Finance Minister Yisrael Katz and Prime Minister Netanyahu agreed to present to the Cabinet next Monday the 2021 budget framework and the clauses of the arrangements bill, as well as the proposed structural changes for the budget. However, Katz is aiming for the Finance Ministry to have the budget passed by the Knesset at some point in February 2021.
• Most Israeli analysts believe that Netanyahu is using the state budget as an excuse to bring down the government and evade giving the Prime Minister’s seat to Gantz as agreed in the coalition agreement.
• The government is also in disagreement about filling the positions of senior civil servants, including a new police commissioner and state attorney. According to the coalition agreement, the Likud and Blue and White parties agreed to put off any senior nominations that they were likely to clash over for six months. However, at the start of October, Gantz said it was time to fill senior law enforcement posts that have long been held by temporary appointees. Following pushback from the Likud, the Attorney General asked the High Court of Justice on Thursday to issue an injunction forcing the government to appoint a new permanent police commissioner.
• Tensions in the government reached a new high at the start of the week when Gantz announced that his defence ministry is opening an inquiry into the so-called “Submarine Affair,” which allegedly saw a number of the Prime Minister’s close associates advocate for the purchase of submarines and patrol boats from German shipbuilder Thyssenkrupp in return for financial rewards.
• A new poll published by Maariv this morning shows the Likud remaining the strongest party in the Knesset with 29 seats, followed by Yamina on 23, Yesh Atid on 19, Arab Joint List on 11, Blue and White on 9, Shas on 8, Yisrael Beiteinu on 8, UTJ on 7 and Meretz on 6. Another poll by Maagar Mohot polling company for Radio 103 FM found that 80 per cent of Blue and White voters and 33 per cent of Likud voters intend to change their vote in the next election.
• Earlier this week, a Channel 13 News poll showed a similar gap between the Likud and Yamina, 27 seats to 23 seats, followed by Yesh Atid-Telem on 20, Arab Joint List on 12, Blue and White on 10, Yisrael Beiteinu on 8, Shas on 7, UTJ on 7 and Meretz on 6.

Looking ahead: Next week Yair Lapid is expected to bring to the Knesset a bill to topple the government and call new elections.

• Yamina have stated that they will support the bill, but Benny Gantz has not said whether his party will support it, which will likely fail without their support.