02:26 - Source: CNN
Israel forms new unity government

Story highlights

The deal is reached early Tuesday morning

The deal comes as Netanyahu called for early elections

"Unity restores stability," Netanyahu says

It may also change Israel's stance with Iran

Jerusalem CNN  — 

Israeli Prime Minister Benjamin Netanyahu and his right-wing Likud party have agreed to form a unity government with the rival centrist political faction Kadima in a move that will put off elections until late next year and create one of the largest coalition governments in Israeli history.

The deal was reached early Tuesday morning between Netanyahu and Kadima Party leader Shaul Mofaz, a day after Netanyahu had publicly called for early elections to be held September 4.

Appearing together at a news conference Tuesday afternoon in the Knesset, the two leaders attempted to explain the sudden change in direction.

“When I thought the stability is rocking I was willing to go to elections,” Netanyahu said. “But when I found out that it is possible to create a broad, very broad government… I understood that we can bring back the state of stability without changing the time of elections.”

Mofaz characterized the agreement as an “historic opportunity” for the government to put the public good before narrow political concerns.

Both men said that the new coalition, made up of 94 of 120 Knesset members, would be better capable of addressing a variety of domestic and security concerns.

The agreement calls for Mofaz to enter the government as a deputy prime minister and offers a number of Kadima Party members senior Knesset committee positions.

Kadima will be given a leading role in redrafting a controversial law that provides an exemption for compulsory military service to ultra-orthodox men in Israel.

Political disagreement over the sensitive issue was one of the major factors leading Netanyahu to push for early elections in September.

Both men also identified upcoming budget negotiations, government reform and the need to restart talks with Palestinians as the most important goals of the new government.

The unexpected move by Netanyahu upends the political calculations of smaller left-of-center parties and provides him with a comfortable governing coalition less sensitive to the demands of his current right-wing coalition partners. For Mofaz and his fellow Kadima members, the move buys another year in office without having to face voters amid sagging popularity ratings.

What impact the new coalition could have on Israel’s handling of Iran’s nuclear program is not entirely clear.

While a stable and unified Israeli government sends a strong signal to leaders in Tehran, Mofaz, a former military chief-of-staff and defense minister, has generally been less hawkish on Iran than Netanyahu and has expressed reservations about Israel taking unilateral military action against the Islamic republic’s nuclear installations.

“This is not going to lead to a major change of policy on Iran,” says Meir Javendanfar, an Iran expert at the Interdisciplinary Center in Herzliya.

“This is far more about domestic politics than Iran,” Javendanfar said, adding, “any decisions on Iran still depended greatly on the United States” rather than a new governing coalition.

The Knesset is likely to endorse the new coalition deal in the next two days.