NETANYAHU GETTING TO CRUNCH TIME

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 000646

SIPDIS

E.O. 12958: DECL: 03/18/2019
TAGS: PREL PGOV IS
SUBJECT: NETANYAHU GETTING TO CRUNCH TIME

Classified By: Political Counselor Marc J. Sievers for reasons 1.4 (b),
(d).


1. (C) SUMMARY. Prime Minister-designate Binyamin Netanyahu
is nearing the first "deadline" he faces in forming a
governing majority in the Knesset. The Likud leader prefers
to have coalition pacts signed prior to Sunday, March 22,
which would guarantee him a majority in the Knesset, but he
could request from President Shimon Peres an additional 14
days in which to conclude those coalition deals. He has
reached an agreement with the Yisrael Beitenu party, but
talks with SHAS have been unexpectedly lengthy, and his other
allies on the right are also likely to bargain hard for their
demands. Embassy contacts and Israeli press report that
Likud representatives are working intensively with Kadima and
Labor representatives to try to persuade one or both to join
the coalition. End Summary.

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APPROACHING THE (FIRST) DEADLINE
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2. (SBU) Netanyahu this week reiterated his desire to form
his coalition before the expiration of the 28-day period
allotted by the Basic Law. The precise date that falls on,
originally thought to be March 20, is the focus of some
debate in Israel. Netanyahu's camp sought a legal opinion
from the President's office, which determined that the date
President Peres tapped Netanyahu to form a government is not
included in the tally. If this opinion holds, the deadline
to form a government would now be Sunday, March 22 (since
March 21 is Shabbat). President Peres can extend the
deadline for up to another 14 days, but Netanyahu may be
concerned that an extension would make it appear that he will
not be able to effectively manage his coalition partners.
Netanyahu probably would be willing to risk that perception,
however, if he were confident that an extension would enable
him to form a government that included Kadima and/or Labor.

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AGREEMENT SIGNED WITH YISRAEL BEITENU;
OTHER AGREEMENTS PENDING
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3. (SBU) Netanyahu on March 15 signed an agreement with
senior coalition partner Yisrael Beitenu, giving its chairman
Avigdor Lieberman the Foreign Ministry portfolio, and setting
aside for his party the Internal Security, Infrastructure,
Tourism and Absorption ministries, and the chairmanship of
the Knesset Constitution, Law, and Justice Committee.
Notably, the agreement specified that each party was
interested in creating a "unity" government and that
portfolios would be redistributed should such a government be
formed. Negotiations with the sephardic ultraorthodox
(haredi) SHAS party, however, have been surprisingly
difficult. SHAS and Likud reportedly went into the February
elections having reached some understandings on what their
partnership would look like, which suggested to us that
negotiations would be relatively smooth. Netanyahu has met
with SHAS leader Eli Yishai over the past several days, but
talks have stumbled over planned real estate reforms to
alleviate the housing shortage in the haredi sector, budgets
for religious education institutions, and the question of
whether or not SHAS would be given a minister in charge of
haredi education. Netanyahu is reportedly prepared to offer
SHAS the Interior (Yishai),Religious Affairs, and Housing
and Construction ministries. Negotiations with Likud's other
"natural partners" - United Torah Judaism, National Union,
and Jewish Home - also could prove difficult, as these
parties are fighting over some of the same portfolios that
are slated to go to SHAS and Likud, and some have felt
slighted that Netanyahu is engaging with them only now.

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UNITY STILL A POSSIBILITY
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4. (C) Netanyahu confidant and incoming chairman of the
National Security Council Uzi Arad told PolCouns on March 18
that Likud representatives are continuing intensive contacts
via multiple channels with Kadima and Labor in an effort to
build a broad-based government. Israeli press also detailed
the talks, reporting that Netanyahu had offered Labor five
portfolios and two deputy minister roles, and commenting that
Netanyahu has spent as much time negotiating with parties to
his left as he has with those on his right. Arad stressed
that from his perspective a broader government is much better
for Israel diplomatically and strategically. He added that
Netanyahu had not decided whether to request an extension
from Peres, but said he would do so only if he thinks he
absolutely needs the extra time to achieve a broader
government. Arad said that Netanyahu at this point plans to

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inform Peres before Shabbat, which starts the evening of
March 20, that he has an agreement with his rightwing
partners, giving him a majority in the Knesset. Once he
informs the President, the Speaker of the Knesset must
convene the Knesset within seven days to hold a vote of
confidence in the new government. This additional week would
enable Netanyahu to make one final attempt at negotiations
with Kadima and Labor without having to request an extension.

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CUNNINGHAM