Netanyahu pulls ahead in Israel’s first post-Oct. 7 election but falls short of a majority

Benjamin Netanyahu pulled ahead by Wednesday morning after Israelis went to bed thinking his rival, Gadi Eisenkot, had the advantage, leaving the election too close to call.

Partial results with over 66% of ballots counted show Netanyahu’s bloc at 56 seats and Eisenkot’s at 48 in the 120-seat Knesset, with Arab-led parties projected at 16. A total of 61 seats are needed for a majority, and neither candidate has a clear path to reaching that threshold. The Arab-led parties, belonging to neither camp, hold enough seats to deny either side a governing coalition — placing them as potential kingmakers in the negotiations ahead.

Record turnout in a post-Oct. 7 referendum

Around 77.7% of eligible voters turned out, the highest in a Knesset election in 27 years, according to the Central Elections Committee. The vote was Israel’s first national election since Hamas’s Oct. 7, 2023 attack and the subsequent wars, and was widely seen as a referendum on Netanyahu’s dominance of Israeli politics since 2009. Netanyahu is the country’s longest-serving prime minister.

Markets sell off

Israeli assets sold off Wednesday as the election produced no clear winner. The shekel fell 1% against the U.S. dollar, and the Tel Aviv 35 stock index traded 2.7% lower. Government bond yields rose across the curve: the two-year added six basis points, the 10-year rose four basis points, and the 30-year gained two basis points.

The Arab-party dilemma

Arab-led parties do not belong to either bloc but are seen as more aligned with Eisenkot, a center-right former military chief of staff, than with Netanyahu. Yet Eisenkot’s camp is hesitant to form a coalition with Arab parties due to mistrust and demonization of Arab political leaders after the Oct. 7, 2023 attacks. Yisrael Beytenu leader Avigdor Liberman, whose party is projected at seven to nine seats and sits in the opposition bloc with Eisenkot, refused during the campaign to rely on Arab parties. Netanyahu and his far-right coalition partners warned of strong Arab participation in the vote, drawing accusations of racism from opponents. Ra’am leader Mansour Abbas said “our vote will change the government.” Eisenkot earlier declared victory and said the preliminary results, which had his bloc slightly ahead, should give him the first right to try to form a government.

Netanyahu’s survival instinct

Israel held five elections between 2019 and 2022, and past electoral stalemates have kept Netanyahu in office when other parties could not form a governing coalition before deadlines passed. Netanyahu may use the upcoming weeks or months to stall formation of the new government, said Amin Saikal, an adjunct senior fellow at Singapore’s S. Rajaratnam School of International Studies, who expects a prolonged negotiation process after final results are announced.

What comes next

Election officials expect to finish counting votes by tomorrow afternoon. Official results are published Nov. 4. The president then asks the Knesset member best placed to assemble a 61-seat majority to form a government, and that leading candidate will have six weeks to assemble a governing coalition. If government formation attempts fail, another election can be called.