Israel President Tasks Gadi Eisenkot with Forming New Government After Election Deadlock

Israel’s President Isaac Herzog has designated Gadi Eisenkot, the main rival of Prime Minister Benjamin Netanyahu, with the task of forming the next government. The announcement follows days of consultations with political parties elected to parliament on October 27.

The decision marks a significant setback for Netanyahu, whose coalition fell from 53 seats to 53 from a peak of 68. Meanwhile, the opposition bloc led by Eisenkot secured 48 seats, and Arab-led parties won 19 seats in the 120-member Knesset. A governing coalition requires a majority of at least 61 seats.

Neither Netanyahu nor Eisenkot secured an outright majority in the election. However, Herzog decided that Eisenkot has the highest probability of forming a coalition because Arab-led parties indicated readiness to support him. Following an official ceremony on Sunday, Eisenkot will receive the mandate and have up to 28 days to build a government, with a possible two-week extension from the president.

Forming a government will require complex negotiations and potential compromises. Eisenkot faces three main paths: a power-sharing agreement with Netanyahu, securing support from Arab-led parties, or striking a deal with ultra-Orthodox parties. Each path presents distinct political challenges. Aligning with Arab-led parties is controversial within Eisenkot's own bloc, and Eisenkot has laid down strict conditions, including recognition of Israel as a Jewish state and classifying Hamas as a terrorist organization. Conversely, bringing in ultra-Orthodox parties would require addressing their demands for military exemptions—an issue Eisenkot and his partners campaigned heavily against.

Meanwhile, Netanyahu has called for a national unity government with Eisenkot, though it remains uncertain if a stable power-sharing agreement can be reached. Netanyahu and his Cabinet will remain in office as a caretaker administration with limited powers until a new coalition is successfully established. The newly elected members of the Knesset are scheduled to be sworn in on Tuesday evening.

If Eisenkot fails to form a government within the allocated timeframe, the opportunity may pass to Netanyahu. Should both figures fail to secure a majority coalition, Israel will face new elections early next spring.

"Political transitions and government formation processes directly impact economic stability, investor sentiment, and business predictability within any region. When parliamentary fragmentation occurs, lengthy coalition negotiations often delay critical policy decisions and fiscal planning. For business leaders and investors operating in dynamic environments, navigating regulatory uncertainty during political deadlock requires maintaining agile operational strategies and closely monitoring legislative developments until a stable administration takes office." — Dr. Shishir Gupta, Founder & CEO, StartupLanes