It is D-Day in Israel. Prime Minister Benjamin Netanyahu has not yet been able to cobble together a coalition to form a government and unless that changes by the end of the day, all hell will break loose in Israeli politics.
As I explained yesterday, talks over forming a new government have been deadlocked over a disagreement on the issue of drafting more ultra-Orthodox Jews into the military. This issue has come to a head because Netanyahu needs the support of Avigdor Lieberman, who has the five seats to put Netanyahu over the threshold required to form a government. Lieberman is insisting that Israel carry out IDF-backed plans to gradually increase ultra-Orthodox enlistment, but two ultra-Orthodox parties, who control 16 seats, are insisting that the draft law is softened.
With a midnight Wednesday deadline quickly approaching (or 5 p.m. eastern), here are the three basic outcomes.
Last-minute deal. Under this scenario, Netanyahu is able to find some way to convince Lieberman and the ultra-Orthodox parties to forge a compromise that would allow him to form a government. This would be the cleanest of all the options, though would still result in a fragile government that could fall apart at any time. This is especially true given the prospect of Netanyahu’s looming indictment over corruption, and his efforts to pass a set of immunity laws meant to shield him from prosecution.
New elections. If Netanyahu fails to form a coalition, his fallback move will be to push to dissolve the parliament, or Knesset, and call for new elections. This is not a great option, because new elections would be costly, and it would be disruptive to have the country endure two contentious campaigns within a few months. But this would be the next best option for Netanyahu, because once the Knesset votes to dissolve, President Reuven Rivlin cannot ask a rival politician to attempt to form a government, and early polls have shown right-wing parties would gain even more seats in a do over election.
Total chaos. If a majority of Knesset members refuse to dissolve the parliament, then Rivlin could ask somebody else to form a government, or he could give Netanyahu another shot. But if nobody is able to put together a governing coalition, and the Knesset refuses to dissolve itself, than it triggers total chaos. Essentially, nobody would have the support to form a government, but Israel would not be able to hold new elections in hopes of voting for a new Knesset that would be capable of forming a government. This is the least likely of the three options, given that right-wing parties have a majority in the Knesset and would likely prefer new elections as a fall back, but as of now, this possibility has to at least be viewed as an open question.

