Netanyahu's deadline to form government set to expire, no sign of progress

By Maayan Lubell

JERUSALEM (Reuters) - A deadline for Prime Minister Benjamin Netanyahu to form a new government was set to expire at midnight in Israel with no sign on Tuesday that the country's longest-serving leader could break more than two years of political deadlock.

There was also no guarantee that, should the right-wing leader fail to assemble a new coalition, parties outside his caretaker government could bridge political differences and unseat him.

Netanyahu, 71, has been in office since 2009 and also served for three years in the 1990s. He has been fighting for his political life through four inconclusive elections since 2019 and is on trial for criminal corruption charges he denies.

If Netanyahu fails to pull off any last-minute surprise by midnight, President Reuven Rivlin can assign the coalition-building task to another member of parliament. That is widely expected to be Yair Lapid, 57, whose centrist Yesh Atid party placed second to Netanyahu's Likud in the March 23 vote.

KINGMAKERS

Netanyahu's bloc of right-wing and Jewish religious parties failed to win a majority, but nor did a camp aiming to oust him, which would have to include his right-wing rivals as well as traditional left-wing and centrist opponents.

Both sides have courted the support of parties representing Israel's around 20% Arab minority, potentially giving them say over a cabinet for the first time in decades.

Naftali Bennett, head of the ultranationalist Yamina party, has emerged as a kingmaker. Bennett, 49, has voiced a preference to join Netanyahu but said he would seek a partnership with the prime minister's opponents to avoid a fifth election as Israel reopens its economy after a swift COVID-19 vaccination rollout and grapples with the challenges of Iran's nuclear programme.

A rotation deal in which Bennett and Lapid would alternate as prime minister has also been widely mooted.

Much of the political deadlock stems from Netanyahu's legal troubles, with some prospective allies pledging they would not serve under a prime minister who is on trial.

Should a new nominee tapped by Rivlin fail to put together a coalition within 28 days, the president can ask parliament to agree a candidate within three weeks. If it cannot, Israel will hold another election.

"We are 60% headed toward another election and 40% toward a new government," Yoav Karkovsky, Kan public radio's political affairs correspondent, forecast in a morning broadcast.

(Reporting by Maayan Lubell; Editing by Jeffrey Heller and Peter Graff)