Prime Minister Benjamin Netanyahu and Foreign Minister Avigdor Lieberman have agreed to jointly reform the Israeli electoral system by raising the threshold for election to the Knesset to a minimum of 3.25 per cent of the vote for each party.

The move is opposed by the smaller parties, particularly those representing the Arab minority, who claim that its real aim is to keep them out of the Knesset.

Mr Lieberman has long been an advocate of raising the electoral threshold as part of a wider “governance law”, which he claims will increase the stability of Israel’s coalition governments.

Previously he demanded doubling the current threshold from two to four per cent. The new decision to raise it to 3.25 is the result of a compromise between him and Mr Netanyahu, who is worried that the new law will be perceived abroad as non-democratic. Within the current coalition, Yesh Atid and Habayit Hayehudi are in favour while only the smaller Hatnuah led by Justice Minister Tzipi Livni is against.

The main opposition comes from the three “Arab parties”, none of which would have entered this Knesset if the new threshold had been in force in the last elections.

“This strange number, 3.25 per cent, is specifically aimed at preventing parties whose support comes from the Arab population,” said MK Dov Hanin (Hadash).

The new law will force the Arab parties to unite into one list. However, while they are regarded by many Israelis as one bloc, there are major differences between socialist Hadash, which believes in Jewish-Arab co-operation, and the Arab nationalist Balad or Ra’am-UAL, which includes Islamist factions.

The governance law is part of a wider legislative campaign which will include a new referendum law and the national service law aimed at drafting yeshivah students into the IDF. The three laws will be at the centre of much controversy and acrimonious debate in this Knesset session.