What is the current status of the coalition formation efforts?

Benjamin Netanyahu now has agreements with Yisrael Beiteinu, Shas, Habayit Hayehudi [the Jewish Home] and Labor. He already has more than 60 members of Knesset [MKs]. In my opinion the National Union party won’t be in the government. Yahadut Hatorah [United Torah Judaism] also seems to have been left out.

This is not a healthy coalition because it’s not homogeneous. I don’t agree with the claim that broad coalitions are more stable. On the contrary, narrow coalitions have a greater chance of surviving and passing meaningful decisions if they are homogenous. Yitzhak Rabin passed the Oslo agreements, and other major decisions, with only one vote.

In this case, Ehud Barak is already at odds with Avigdor Lieberman. Barak is the left goalpost of this government so he will try to evacuate outposts at the same time as the right will work on settlement expansion. Everything depends on Netanyahu, however, on what he wants to do, on the targets he sets. If his aim is only to survive as prime minister, we have a problem.

How is the agreement with Labor affecting the internal debate inside the Likud, Yisrael Beiteinu and Kadima?

Likud is left with peanuts. The governing party with 27 mandates has only a few portfolios—treasury, education, transportation and communications. In practice, Netanyahu reneged on all his promises. I’m not just talking about Silvan Shalom who was supposed to be foreign minister, and who, according to my understanding, may even end up with nothing, but also about the ’stars’ Netanyahu prided himself on bringing into the party—Benny Begin, Dan Meridor and former Chief of Staff Moshe Yaalon. They will be ministers without portfolios, if at all. Netanyahu sacrificed the Likud to be prime minister and paid a ridiculous price for his coalition partners. It started with his commitments to Shas in October before the elections, continued with Yisrael Beiteinu and reached its peak with Labor yesterday.

No one in the Likud will rebel now, but starting off on the wrong foot isn’t a positive sign. Netanyahu will need outstanding political skills to contain the anger within the Likud. People are even talking about the possibility of rotation of ministers, with two Likud MKs splitting a portfolio for two years each. But who can seriously talk now about a stable four-year government?

Avigdor Lieberman is upset at Netanyahu, not for bringing Labor in, but for paying such a high price—five portfolios for seven voices whereas his party got five portfolios for 15. But he won’t make a fuss about it.

As for Kadima, the party is split into two camps—there is the Livni camp and the camp with the other 27 Kadima MKs, all frustrated because Livni didn’t negotiate with Netanyahu and find a way to join the government. But Kadima was founded by Sharon after he’d learned his lesson from the Likud rebels. He structured the party with the leader setting the rules.

Livni is right from her perspective. She is giving up on immediate benefits to get them later as prime minister. Whoever is the head of opposition when Netanyahu is prime minister will succeed him. In general, in Israel, if you look back, prime ministers are elected from the opposition.

The appointment of Avigdor Lieberman as foreign minister has sparked criticism internally but mostly abroad. What impact do you think this appointment will have for Israel’s diplomatic efforts?

The impact of foreign ministers in Israel depends first and foremost on the personality of the minister. Most foreign ministers do nothing. Shimon Peres, as foreign minister, on the other hand, brought home the Oslo agreement.

I think Lieberman might turn out to be a huge surprise. If you recall after the first Lebanon war, Ariel Sharon, as minister of construction and housing I believe, went to Washington and no one was willing to meet with him. In 2002, the same Sharon became President Bush’s darling and later on disengaged from Gaza. Lieberman wants the same thing to happen to him. Therefore, he will make an enormous effort to speak to the Americans in a language similar to their own. From what I’ve heard, he will have an impressive first visit in Egypt. In interviews and conversations we’ve had, the most recent one being last night, he told me he is ready for a two-state solution, settlement evacuation, land swaps. He is a pragmatic man who is striving to transform himself from the leader of the minority into the mainstream. This is the reason he wanted the Ministry of Foreign Affairs. He sees this appointment as an opportunity to make this transition.

Now, it’s Israel and anything can happen here. Another war could start and then my analysis would be totally wrong. But Lieberman could be the biggest surprise of this government.

Similarly, what do you think about the appointment of Uzi Arad, who has been barred from entering the United States, as Israel’s next national security adviser?

I think this is an internal U.S. matter. As I understand the American system, bypassing this restriction will be very difficult. As I understand it, the reason behind this is technical. He was on the meeting schedule of someone from AIPAC who was involved in that matter. Overall, I think he is a positive person, pragmatic, experienced and the prime minister-designate has his trust. I do feel uncomfortable with the fact that Israel’s national security adviser can’t travel to the United States, though.

You’ve co-written a book about Netanyahu. What do you think he learned from his previous experience as prime minister and what would you guess are his goals and intentions now?

Netanyahu of 2009 is not the Netanyahu of 1996. He is 60 today, and then he was 47. He is more experienced, a little calmer and he knows he won’t get a third chance. On the negative side, though, his performance hasn’t changed remarkably—we saw that in his campaign as well as now in the political negotiations. His way of conduct, both privately and publicly, with aides selected according to the whims of his wife Mrs. Netanyahu, all of that hasn’t changed. Despite being more level-headed now, I doubt it if Netanyahu of 2009 will be fundamentally different from what we’ve seen in the past.

With that said, the thing that scares Netanyahu the most, horrifies him, is what will happen with the U.S. government. This is why he paid so much to have Labor in the government. He wanted Labor to back him on his first visit to Washington rather than go there as the head of a narrow right-wing government. This is why he is now considering appointing Alon Pinkas as Israel’s ambassador to Washington. The other name being raised is Dore Gold, which is bad news. But Pinkas, not a classic supporter of Netanyahu, who is close to Ehud Olmert, Ehud Barak and Shimon Peres, a person who knows the U.S. system and the Democratic Party, signals how important relations with the United States are to Netanyahu.

Speaking of the United States, what do you think might be points of cooperation between the new Israeli government and the Obama administration and what might be points of tension?

As far as Netanyahu is concerned, he would have liked his whole relationship with the U.S. administration to revolve around Iran. I think he understands that an Israeli strike on Iran is not an option, and if he doesn’t he’ll learn that in his first working meeting with the the chief of staff [of the IDF, Gabi Ashkenazi]. He understands that Israel needs the United States and the coalition it is trying to form to confront the Iranian challenge. The problem is that the moderate Arab world is necessary for this coalition and to reassure them, the United States needs to promote Arab-Israeli peace. Each party in this global coalition may be asked to fulfill its role, including Israel on issues like Syria, a settlement freeze, etc. and this is where we might see confrontation.

Look, the U.S. administration will work with any government here. The question is what happens in reality. This morning we heard the news that Netanyahu and Lieberman had struck a secret deal to build in E1. I don’t see Hillary Clinton accepting this. Netanyahu wants it both ways; satisfying his right-wing partners by not making peace and expanding settlements, while at the same time maintaining good relations with the United States. Either he will clash with his coalition partners and his own MKs in the Likud or he will clash with the United States. When he reaches that junction, he will have to make a decision.

Do you think there will be any surprises?

Sure. It all depends on what Netanyahu wants. For peace to go forward, though, he will need to switch his coalition.