Israel’s Netanyahu reaches coalition deal with far-right Religious Zionism party

JERUSALEM (Reuters) -Israeli Prime Minister-designate Benjamin Netanyahu reached a coalition deal with the far-right Religious Zionism party, bringing him closer to securing a new government after an election last month, Netanyahu’s Likud party said on Thursday.

Religious Zionism will be given control of the Finance Ministry as part of a rotation, Likud said, though it did not lay out how the rotation would work. It will also have strong influence over policies in the occupied West Bank and the country’s justice system.

The deal nets Netanyahu control of 46 of the Knesset’s 120 seats so far.

Israel’s Army Radio reported that Bezalel Smotrich, 42, who heads Religious Zionism, would serve as finance minister at the outset and will then be replaced.

His party, which opposes Palestinian statehood and supports extending Israeli sovereignty into the West Bank, will be given authority over Jewish settlement activity there, though it will be in coordination with Netanyahu, the Likud statement said.

“This is another significant step bringing us closer to forming a right-wing, nationalist government that will look out for all Israeli citizens,” Netanyahu said.

The agreement comes after Netanyahu’s right-wing alliance won a comfortable victory in a Nov. 1 election, Israel’s fifth in less than four years.

Israel captured the West Bank, Gaza and East Jerusalem – areas that Palestinians want for a state – in a 1967 war. U.S.-sponsored negotiations stalled in 2014 but the expansion of settlements has continued despite international opposition.

Smotrich is more known for his nationalistic politics than his economic views. He ran together with far-right ally Itamar Ben-Gvir, though they now head separate factions in Knesset.

Ben-Gvir is already signed up with Netanyahu after being promised the National Security Ministry, a newly created portfolio with powers over police in Israel and the West Bank.

Smotrich served briefly in a previous Netanyahu-led government as transportation minister from 2019-2020. He advocates conservative fiscal policies like lowering the debt-to-GDP ratio, favors a universal tax decrease on businesses and hopes to rein in public sector strikes.

(Reporting by Ari Rabinovitch; Editing by Mark Heinrich and Cynthia Osterman)