Analysis: A chance for Livni
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As far as Bibi was concerned this was one step too far by the leader of Israel's opposition, Tzipi Livni. Just days after the first lady of Israeli politics appeared in the media worldwide to defend Israel's maritime actions, she was proposing a motion of no confidence in the government because of its handling of the flotilla affair.
The normally dovish Ms Livni attacked Mr Netanyahu from his right flank in Monday's no-confidence debate, insisting that Israel not allow an international inquiry into the events at sea.
Leader of the largest party in the Knesset, Kadima, Ms Livni has held a remarkably low profile since Mr Netanyahu formed his government 14 months ago. Despite that, she is still regarded as a trustworthy politician - an unusual quality in Israel. She knows she can count on support from the political left but is adopting a position of uber-Zionism to pull in voters from the more hawkish elements of Israeli society.
It is a clever tactic from someone who has often been accused of being politically naïve.
This time, she appears to be reading the geopolitical map very well. She realises that if Mr Netanyahu is going to survive his full four-year term while soothing the wrath of Mr Obama, he is going to have to alter his coalition sooner or later.
Indeed, on Monday, in a private conversation (though nothing stays private in Israel for long), President Shimon Peres reportedly told Mr Netanyahu that the only way to end Israel's international isolation and the constant media attacks is by moving swiftly towards a peace deal with the Palestinians.
This advice leaves Mr Netanyahu falling into Ms Livni's lap. Of all the politicians in Israel today, she is arguably the one with the best working relationship with the Palestinians and she is perhaps the most able to cut a deal.
Mr Netanyahu is well aware that his key political rival, Ms Livni, could well eclipse him in any coalition arrangement. It would be something akin to Nick Clegg taking the lead on economic policy and singlehandedly showing David Cameron the path to stability and growth.
Both Bibi and Ms Livni know only too well that the peace process is the key to winning elections and both are jockeying to ensure that they appear to be leading in this arena.
Such is the political system in Israel that in addition to firefighting the flotilla episode, behind closed doors Mr Netanyahu, Ms Livni and the leader of the Labour Party, Defence Minister Ehud Barak, are involved in a power game and figuring out how to come out of last week's events smelling of roses, while trying to make their political foes look insecure and unelectable. It is probably much the same elsewhere, but in the UK, US and so on it really is just about the economy; in Israel the politicians are playing politics with the very existence of the state.
David Harris is an Israel-based writer