Netanyahu hours away from deadline for forming ruling government
Prime Minister Benjamin Netanyahu has until late Wednesday to form a new ruling coalition with a recalcitrant ally or face the possible end of a decade of combative leadership of Israel.
As the hours ticked by, there was no sign of a breakthrough in talks with his far-right former defence minister, Avigdor Lieberman.
The Labor Party also announced they had rejected an overture from Netanyahu to join the government.
"Over the course of the last month, the Labor party received a number of invitations to join the government," Labor Chairman Avi Gabbay wrote.
"The latest proposal last night included committing to a package of steps to protect democracy. It included annulling the reinforcement, immunity and personal laws, among others. Members of the faction discussed the proposal and decided not to accept it."
Netanyahu had declared himself the winner of a national ballot last month, but he now has until midnight (21:00 GMT) to tell President Reuven Rivlin whether he has put together an administration, and his political future hangs in the balance.
Parliament began a full-day debate on a motion to dissolve itself and call a new election if no deal is struck.
Political sources said Netanyahu was already seeking agreement with the leaders of parties in the legislature for a mid-September election day, the Reuters news agency reported.
Failure to forge a coalition would take the task out of the 69-year-old Netanyahu's hands, and could see Rivlin asking another legislator, either from the prime minister's right-wing Likud party or from the opposition, to try.
That presidential move, which would sideline Netanyahu, can be avoided with a coalition agreement deal or if parliament approves an election.
Netanyahu was on track to become Israel's longest-serving prime minister in July, surpassing founding father David Ben-Gurion, and he is no doubt aware of the weighty milestone.
Political commentator Chemi Shalev, writing in Israel's Haaretz newspaper, said a last-minute agreement was still possible and Netanyahu would still be the favourite to win a new poll.
But he said Netanyahu's critics now find themselves fantasizing about a world without him.
"It's not an easy task, given his decade in power and the four more years he supposedly had coming," Shalev wrote.
"Young Israelis can't even begin to imagine an Israel without him: Netanyahu as prime minister is all they've ever known."
Lieberman has stuck to his guns in a battle with the ultra-Orthodox United Torah Judaism party, a member of Netanyahu's current interim government, to limit traditional military draft exemptions for Jewish seminary students.
Without the support of Lieberman's Yisrael Beitenu party, which has five seats in the 120-member Knesset, Netanyahu cannot put together a majority government of right-wing and religious factions led by Likud.
Political commentators said that as the prospects dimmed for a compromise with Lieberman, Netanyahu would focus his efforts on enlisting the 61 votes needed in parliament to approve a new election.
The brinkmanship six weeks after the closely contested April ballot poses another challenge to Netanyahu's decade-long rule and deepens political uncertainty in a country riven with division.
'Deal of the century'
A new election could also complicate US efforts to press ahead with President Donald Trump's peace plan in the Israeli-Palestinian conflict, dubbed the "deal of the century".
Even before it has been announced Palestinians have rejected it as a blow to their aspirations for statehood.
The White House team behind the proposal, including Trump's son-in-law Jared Kushner, is currently in the Middle East to drum up support for an economic "workshop" in Bahrain next month to encourage investment in the occupied West Bank and Gaza Strip.
On Tuesday, ahead of Kushner's visit to Jordan on Wednesday, hundreds of political and public activists staged a sit-in near the US embassy in Amman, urging Jordan not to attend the Bahrain summit
The US team is due in Israel on Thursday.
'I am not an vengeful man'
Lieberman said on Wednesday he was not backing down in what he termed a matter of principle over the conscription issue, and he denied Likud allegations his real intention was to oust Netanyahu and lead a "national camp".
"I am not an vengeful man and I don't hold a grudge," said Lieberman, who last year resigned as defence chief in a dispute with Netanyahu over policy toward Gaza.
Despite looming indictments in three corruption cases, Netanyahu had appeared to be on course for a fifth term as head of a right-wing bloc after he squeezed past centrist challenger Benny Gantz, a former head of the Israeli armed forces.
Public attention had been focused less on coalition-building and more on moves Netanyahu loyalists were planning in parliament to grant him immunity and to pass a law ensuring such protection could not be withdrawn by the Supreme Court.
Netanyahu has denied any wrongdoing in the cases and is due to argue at a pre-trial hearing in October against the attorney general's intention, announced in February, to indict him on bribery and fraud charges.