JERUSALEM, Israel - Israelis woke up to a stunning reversal Tuesday morning. Prime Minister Benjamin Netanyahu and Kadima Party chairman MK Shaul Mofaz reached an agreement to form a unity government, thereby canceling early elections literally at the midnight hour.
"Unity restores stability. A broad national unity government is good for security, good for the economy and good for the people of Israel," the Prime Minister's Office said in a statement.
The addition of Kadima to the government gives Netanyahu's ruling coalition 94 seats in the 120-member Knesset, the largest governing bloc in modern Israeli history.
Click play to watch the updated report, followed by analysis from CBN News Sr. Editor John Waage on how this move impacts Israel and the rest of the Middle East. Waage spent several years reporting from Jerusalem and has been following relations between the U.S., Israel, and Iran closely.
While Netanyahu said he did not want to dissolve the government, "rifts" within the coalition prompted him to call for early elections on Sept. 4.
Mofaz, who served as Israel Defense Forces chief of staff like Defense Minister Ehud Barak, will be appointed deputy prime minister and will join the inner security cabinet making critical decisions on defense matters.
Kadima will also head up a committee to replace the Tal Law, legislation that allows ultra-Orthodox men enrolled in yeshiva (Torah seminary) to opt out of compulsory military duty. That issue is a sore point among Israelis across the political spectrum and one of the main issues factoring into the call for early elections.
"We did a great thing for the sake of the State of Israel," Mofaz said. "I don't want government portfolios, even for myself."
Late last night, Netanyahu phoned President Shimon Peres, who is on a state visit in Canada.
Peres' office issued a statement saying, "President Peres congratulated Prime Minister Netanyahu on the decision and said that a national unity government is good for the people of Israel and that the good of the state, in light of the crucial challenges facing it, requires broad national unity."
Down to the Wire
Most Israelis were expecting to go to the polls on Sept. 4. Pollsters predicted Netanyahu's Likud Party would maintain a hefty lead, with 31 mandates, while Kadima would drop from 28 to 11.
Contrary to media reports, most Israelis are satisfied with Netanyahu's leadership and were not particularly keen on dissolving the government a year before its term ends.
Others, among them Labor Party chairwoman Shelly Yachimovich, were dismayed with the announcement.
Yachimovich, who said her party had a "vested interest in having elections as soon as possible," slammed the decision, calling it a "dirty deal." Polls predicted that Labor could go from its present eight mandates to 18.
"This filthy and ugly exercise is a form of pollution that damages democracy," Yachimovich told Israel Radio Tuesday morning.
With Kadima in the government, Labor will lead the opposition, representing 26 total out of 120 Knesset seats.
There were other dissenting voices, including a few within Likud, but supporters far outnumbered dissenters.
Three Years Later
From the outset, Netanyahu wanted as broad a coalition as possible, but he was unable to convince former Kadima chairwoman Tzipi Livni to join the government.
Three years later, with the threat of a nuclear-armed Iran that much closer and the rise of Islamic regimes in the wake of the "Arab Spring" threatening the peace treaties with Egypt and Jordan, a stable coalition is more crucial than ever.
"It's good news," one Israeli wrote on YNet's talkbacks. "Bibi would still have been prime minister anyway. Good there's unity…Good [to] have [an] intact mindset for dealing with Iran…In these very difficult times, this was a very good outcome."