Eisenkot is winning the Knesset. Netanyahu still commands the army, and probably will on New Year's Day.
Future Times4 min read
In 30 seconds
Eisenkot's bloc has beaten Likud in the Knesset's first votes, and he has warned the caretaker prime minister against military moves. Traders put the chance of a new Israeli government by 31 December at 40%.
- Eisenkot's bloc is winning the Knesset's first votes, but Netanyahu commands the army until a new government is sworn in
- Traders give a new government by 31 December only a 40% chance, so a caretaker Netanyahu on New Year's Day is likelier than not
- A US-Iran pause by year end is priced at 82.5%, well before any Israeli government
What it means
- GeopoliticsA caretaker who says only Iran's regime falling removes the threat, while Washington signals a pause, is the main…
- MarketsTraders expect a US-Iran pause by late November but give an end to the blockade by year end only 35%, so oil and…
- PoliticsThe speaker vote on 17 November will show whether the 67 recommendations are a working majority.
- PolicyThe bloc is already moving bills on the judicial overhaul, prime ministerial term limits and an October 7 inquiry, so…
What to watch
- 17 NovTuesday 17 November, the speaker vote
- 6 DecSunday 6 December, Eisenkot's first deadline
The odds
Polymarket · live, 06:12 GMTEisenkot becomes Israel's next prime minister
down 7 points over 7dfrom 71% a week ago65% when this was published
Now · 64%
Think the market's wrong? Add your forecast and see who's closer.
- Prime Minister of Israel after the next election: Benjamin Netanyahu17%down 2 points
- Next Israeli government formed by December 31, 202647%up 6 points
- Next Israeli government formed by February 28, 202768%down 3 points
On Wednesday, three days after the mandate President Herzog handed him, Gadi Eisenkot wrote to Benjamin Netanyahu about how to use the army. He urged the caretaker prime minister to hold off on security moves until a government with the Knesset's confidence is sworn in, and warned that military action without an immediate threat could have "devastating consequences for Israeli democracy".
Netanyahu's office called the letter "an irresponsible move to discuss sensitive security issues in public", said every decision was "based solely on security considerations", and invited Eisenkot to join a government led by Netanyahu. Eisenkot then asked the attorney general to step in, saying Netanyahu had refused him an operational security briefing through official channels.
A majority that cannot yet give orders
The letter exposes the gap at the centre of Israeli politics. Eisenkot's side has the numbers: 67 of the 120 members recommended him, made up of his four-party bloc's 48 seats and the 19 held by the Arab-led parties. Netanyahu's bloc holds 53. But until a new cabinet is sworn in, the army answers to the man who lost his majority.
Traders expect that gap to last. They put the chance of a new Israeli government being formed by 31 December at 40% as of 11 November. The figure topped 50% in the past seven days before it fell 10 points in a day. By 28 February it is 70.5%, and by 30 June 86%. The first figure means roughly a 60% chance that no new government exists on New Year's Day, with Netanyahu still in charge as caretaker. It rests on only about $60,000 of trading, so it is a guide, not a verdict.
Traders are far surer about who ends up in the job. They give Eisenkot a 65% chance of becoming prime minister, up 8 points in a week, and Netanyahu 23%, down 5. Read together, the prices say Eisenkot wins the post but not quickly.
Wins on procedure that did not make a government
Tuesday and Wednesday followed the same pattern. On Tuesday the new Knesset was sworn in. Netanyahu warned that Iran is working to revive its nuclear threat and said: "The only way to permanently remove this existential threat is through the downfall of the Ayatollah regime." Eisenkot called his address "delusional, divisive, hateful and disgraceful". His party Yashar cancelled its scheduled negotiations with Likud.
On Wednesday the opposition bloc overruled Likud on the make-up of the Arrangements Committee, which sets up the Knesset's other committees. Avigdor Liberman will chair the Foreign Affairs and Defence Committee. A majority of members has asked to replace the speaker, Amir Ohana, with Yashar's Matan Kahana, in a vote set for Tuesday 17 November. The bloc has also filed bills for an inquiry into the 7 October attacks, term limits for prime ministers and a repeal of the judicial overhaul.
Each win shows the bloc can hold together on procedure. None of them forms a government.
Why Iran sits behind the letter
Netanyahu's argument that only regime change in Tehran ends the Iranian threat sits awkwardly with Washington. Trump says the United States has "already won" the Iran war but wants "total victory". He has also said he will hold off a new offensive for now, citing "positive momentum". The army's chief of staff, meanwhile, told troops to prepare for "rapid changes and surprise" on all fronts.
Markets lean towards Washington's line. Traders put the chance of an effective two-week US-Iran ceasefire beginning by 22 November at 65%, and by the end of the year at 82.5%. That implies a pause in US-Iran hostilities well before an Israeli government exists, so a Netanyahu who wanted to resume the war would be doing it as a caretaker, against Trump's stated preference. An end to the US blockade of Iran is a different matter: traders give it only 35% by 31 December.
Where traders could be wrong
Eisenkot has until 6 December to form a government, extendable to 20 December. The sums are tight. His bloc's 48 seats plus the ultra-Orthodox parties' 13 would reach exactly 61, but Shas has called reports of a deal to let such a government pass "total fake news". Liberman has ruled out a minority government propped up by Arab parties. If Eisenkot fails, the president can turn to Netanyahu.
The other way to be wrong is faster. A deal that brings in Likud or the Haredi parties would end the caretaker period weeks early, and the December price could look low. The 17 November speaker vote is the first test of whether the 67 hold together on a roll call that is not about a cabinet.
What it means for markets, politics and security
Geopolitics A caretaker who says only Iran's regime falling removes the threat, while Washington signals a pause, is the main source of risk in the weeks before a government is sworn in.
Markets Traders expect a US-Iran pause by late November but give an end to the blockade by year end only 35%, so oil and shipping stay exposed to Iran headlines. An Israeli decision to strike without US backing would be the tail risk to that pause.
Politics The speaker vote on 17 November will show whether the 67 recommendations are a working majority. A defeat for Eisenkot's bloc would be the first sign the December and February readings were too high.
Policy The bloc is already moving bills on the judicial overhaul, prime ministerial term limits and an October 7 inquiry, so the fight over the courts does not wait for a cabinet.
What to watch
Tuesday 17 November, the speaker vote. Sunday 22 November, the date by which traders put a US-Iran ceasefire at 65%. Sunday 6 December, Eisenkot's first deadline.
Eisenkot is winning the arithmetic. Until a government is sworn in, Netanyahu still holds the command.