Israel rebooted: Bibi's coalition deal
Israel’s Prime Minister Benjamin Netanyahu, left, and Kadima leader Shaul Mofaz
The political earthquake that shook Israel in the middle of the night this week has sent shockwaves well beyond the confines of the Knesset.
Benjamin Netanyahu is now one of the most powerful prime ministers ever to lead Israel, and many commentators are wondering if he is now sufficiently empowered to alter the course of Middle East history.
His new coalition certainly has the potential to make bold moves. It has the support of over three-quarters of the Knesset and no single-component party is large enough to topple him. Crucially, his partner, Shaul Mofaz, agrees with him on most of the biggest topics.
And since the Prime Minister and his new second-in-command now have at their disposal a coalition in which the religious and far-right elements have no power of veto, Mr Netanyahu can no longer use the excuse - as he has often done in the past - that he wants to move on the difficult issues but that his hardline partners just will not let him.
However they go about their new partnership, Mr Mofaz and Mr Netanyahu face a daunting list of challenges. They include: re-launching talks with the Palestinian Authority before a new intifada kicks off; handling the Iranian nuclear issue as it becomes critical; facing this summer's inevitable round of social protests; carrying out court eviction orders of West Bank outposts in the face of settlers' anger; coming up with a formula that will end the inequality of yeshivah students' exemption from national service; and, finally, getting around to reforming Israel's woefully inadequate electoral system.
Now that early elections are off the table, Israel does not have to go to the polls until November 2013, and the months leading up to that will be given over to electioneering. That means that when the new coalition sits down for its first cabinet meeting next week, it will have little more than a year for effective governing. Twelve months to solve all of Israel's problems. If they succeed in even one of these challenges, it will have been time well used.
Mr Mofaz is to be the government's envoy to the Palestinian leadership in potential peace talks, but he may not have the leeway to make the few concessions necessary to get the talks back on track. For now, the peace plan that he has been pushing while in Opposition - to immediately establish a Palestinian state on 60 per cent of the West Bank - is on hold.
Nevertheless, if Mr Netanyahu gives Mr Mofaz the necessary backing and clamps down on the pro-settlement wing of his own party, we may see a resumption of talks. But, of course, no form of agreement will be reached with a government in its last year.
Tehran-born Mr Mofaz has been very critical of the handling of the Iranian issue by the government and has described an attack on Iran at this point as "premature" and "destructive". Once in the cabinet alongside his former commander, Defence Minister Ehud Barak, he may change his mind.
Meanwhile, the fact that the most senior security veteran in the opposition has joined the government will help Mr Netanyahu withstand criticism from former intelligence chiefs that he is "messianic" on Iran.
What will become of the aims of the protest movement? Just last month, Mr Mofaz was promising to lead the protests this summer. Now he will be defending the government and Labour leader Shelly Yachimovich could leverage the alienated middle class.
When it comes to outposts, right-wing pressure prevented the government from carrying out court orders to evacuate them. With Kadima's votes, the hardliners do not have sufficient clout to block the evictions. Major clashes can be expected with the settlers.
On the thorny issue of Charedi military service, the High Court has given the government until August to draft a new law. The Charedi parties no longer have the power to block legislation and since Likud, Kadima, Yisrael Beiteinu and Atzmaut are all agreed on this issue, the new coalition has a good chance here.
The Opposition, meanwhile, has been dealt a major blow. It does not have enough votes to challenge the government in the Knesset. Yair Lapid's new party is not even in parliament and he will find it very hard keeping the public's attention for another year. Ms Yachimovich was robbed of her opportunity to enlarge her tiny rump of a party. With only eight Labour MKs, she has to keep reminding the Prime Minister that he has no excuses now.