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Isaac Herzog, Israel’s opposition leader, will replace Natan Sharansky as Chairman of the Jewish Agency for Israel, it was announced yesterday.

The Jewish Agency’s search committee will formally present its decision on Sunday to the organisation’s board of governors and recommend that Herzog serve in the position for four years. His term will begin on 1 August.

Herzog confirmed the appointment, saying: “In light of an appeal I received from Jewish diaspora leaders, I have agreed to accept the position of Jewish Agency Chairman. These are days of considerable challenges for the Jewish people’s relations with the State of Israel.”

Labour Party leader Avi Gabbay endorsed the choice and congratulated Herzog as “the right man in the right place to reconnect the US and world Jewry to Israel”.

Israeli Prime Minister Benjamin Netanyahu opposed Herzog’s appointment and instead nominated his political ally, Energy Minister Yuval Steinitz for the position. In an unprecedented move, the selection committee, led by World Zionist Organization (WZO) Chairman Avraham Duvdevani, ignored the Prime Minister’s recommendation and informed him on Wednesday that the committee voted to appoint Herzog.

Netanyahu was reportedly angry that the committee did not even interview Steinitz for the job. The Prime Minister’s office subsequently cancelled a high level coordination meeting between the Government, the Jewish Agency and the WZO, which Netanyahu was due to attend on Monday.

Naftali Bennett, Israel’s Education and Diaspora Affairs minister, said the Jewish Agency is picking a “man of values, who will contribute greatly to the consolidation between us and our brothers in the Diaspora”.

Herzog is intending to focus on efforts to unite Jewish religious denominations following the extensive arguments about an official space for non-orthodox Jewish prayer at the Western Wall in Jerusalem and continued political disagreements about conversion to Judaism resulting from a draft conversion bill.

Labour leader Avi Gabbay is not a member of the Knesset so must now appoint a new Parliamentary leader for his party. He will either appoint his party ally Shelly Yachimovich or his  partner in the Zionist Union, Tzipi Livni.

The Jewish Agency is the largest Jewish non-profit organisation in the world with a budget of more than $400m. It runs Jewish education programmes in Israel and around the world and provides services and assistance to Jewish immigrants to Israel.