Domestic Disagreements Limit Netanyahu’s Options with Washington

As the Hamas-Israel war enters a new phase, Prime Minister Binyamin Netanyahu is finding it increasingly difficult to balance relationships inside his government and with the White House. On the military front, Israel has taken most of northern Gaza, though an estimated 5,000-6,000 Hamas fighters remain active in various tunnel networks. Major combat operations have largely shifted to central and southern Gaza, while the Israel Defense Forces (IDF) have released most of the 360,000 reservists mobilized at the beginning of the war and withdrawn some forces for retraining.

Yet the situation is murkier on the diplomatic and political fronts. Earlier today, Netanyahu and President Biden spoke with each other for the first time in almost four weeks, and the prime minister is fundamentally at odds with Benny Gantz’s centrist National Unity party. When Gantz joined the government shortly after the October 7 attacks, he helped dilute the influence of the far-right parties led by Finance Minister Bezalel Smotrich and National Security Minister Itamar Ben-Gvir while focusing the cabinet on the mutual goal of driving Hamas from power in Gaza. Yet their policy differences have become more salient since then, and Netanyahu seems convinced that Gantz—who is riding high in the polls—will soon leave the government to capitalize on the prime minister’s wartime unpopularity in potential early elections. This has made Netanyahu more dependent on his far-right ministers, much to the consternation of the White House.

War Aims and the Fate of the Hostages

On January 18, Netanyahu reaffirmed that Israel seeks “total victory” against Hamas and reportedly told local leaders in southern communities near Gaza that he expects the fighting to last into 2025. He and Defense Minister Yoav Gallant argue that Israel’s ability to free hostages depends on maintaining military pressure against Hamas. Yet despite major operations that have killed an estimated 9,000 Hamas fighters, no further hostages have been released since November.

Gantz and Gadi Eizenkot, another former IDF chief of staff representing National Unity in the war cabinet, make the opposite case. They argue that the remaining hostages—estimated to number 132, though the IDF believes at least 27 are dead—have been held under difficult conditions for over 100 days and need to be the top priority right now, even if securing their release requires an extended halt in the fighting. Last week, the cabinet discussed a Qatari proposal in which hostages would be gradually freed in exchange for a permanent ceasefire and the exile of Hamas leaders. Although Hamas has publicly rejected any plan in which it cedes control over Gaza, observers question whether Doha would float this idea if the group was truly unwilling to consider it.

Washington might be more sympathetic to Netanyahu’s stance if he could convince the White House that Israel is on the cusp of victory, but this is not the case even by his own admission. At the same time, U.S. officials are unwilling to make Israel end the war given its view that Hamas is an intolerable security threat post-October 7. The Biden administration therefore seems to be hoping that this internal Israeli debate (i.e., prioritizing hostage releases or continued fighting) will be resolved in a way that provides a diplomatic off-ramp from the war.

Disagreeing on the Day After

Gallant has stated that Israel does not want to provide civilian services to Gaza after the war, noting earlier this week that a strong Palestinian Authority is in Israel’s national security interest. In contrast, Netanyahu rejects a postwar role for the PA in Gaza. Their policy disagreements are no doubt exacerbated by their poor personal relationship, which has reportedly devolved to the point where they have not met one-on-one since the war began.

This particular debate raises crucial questions now that Israel has begun to pivot away from major combat operations in parts of the north. Can the estimated one million Gazans who fled south return to their homes soon, and if so, who will provide public order and basic services? If Israel rejects the PA, what are the other options? Secretary of State Antony Blinken recently announced that Israel had agreed to allow a UN feasibility study about civilian return to northern Gaza, but U.S. officials say Jerusalem has yet to facilitate this.

Biden and Netanyahu’s Silence

Despite holding sixteen phone calls in the weeks after the October 7 attacks, Biden and Netanyahu had not spoken directly for almost a month before today’s call, even as bilateral differences swirled on several issues. For one, Smotrich has blocked the transfer of some PA tax revenues that are collected by Israel and subsequently used to pay the salaries of bureaucrats in Gaza. In response, the PA said it will not accept partial revenue transfers, potentially leaving its West Bank bureaucrats and security personnel with no salary payments either. President Biden has prioritized this issue given the joint U.S.-Israeli interest in preventing violence from erupting in the West Bank, but no progress has been seen thus far.

The same goes for certain other U.S. requests, such as increasing humanitarian aid beyond the 200 trucks entering Gaza daily and guaranteeing that no IDF strikes are conducted close to camps in southern Gaza. These issues were not resolved in today’s call.

Administration officials are troubled by the fact that Netanyahu will not stand up to Smotrich or other far-right ministers at a time when President Biden has taken political risks with progressives in his base by supporting Israel. Netanyahu may believe that further humanitarian steps should be reserved as bargaining chips to get more hostages out. Yet he has also argued that Hamas leaders are indifferent to the suffering of Gazans, so the power of this particular bargaining chip is questionable.

Saudi-Palestinian Linkage?

Washington has been mulling a wider Arab-Israel diplomatic initiative once the war ends, and Jerusalem would be better positioned to shape the contours of this plan if Netanyahu improves his relationship with Biden. During remarks at the annual Davos summit on January 16, National Security Advisor Jake Sullivan made clear that a breakthrough between Saudi Arabia and Israel is linked to a political horizon for the Palestinians: “Long before October 7th, the United States was deeply engaged in an effort to secure a political horizon for the Palestinian people...We determined the best approach was to work towards a package deal that involved normalization between Israel and key Arab states, together with meaningful progress and a political horizon for the Palestinian people...The basic recipe, which is peace between Israel and its Arab neighbors, a two-state solution with Israel’s security guaranteed, these pieces are...connected. They were before October 7. They remain linked today.” Sullivan also emphasized that this outcome was possible “in the near term,” and that it entails “a future where Gaza is never again used as a platform for terror.”

The same day, Secretary Blinken told CNBC that Arab states had reiterated their willingness to provide regional “guarantees” to Israel if it moves forward with the Palestinians. Yet Israeli officials have long viewed foreign guarantees as meaningless so long as radical groups like Hamas are able to outmuscle the PA—especially when Arab states are likely unwilling to use force to constrain the group. Even President Isaac Herzog, the former leader of the center-left Labor Party, went so far as to tell an audience at Davos that no Israeli “in his right mind” is thinking about a two-state solution right now.

Conclusion

According to recent polls, the Israeli public remains deeply grateful for President Biden’s strong support during the war, so Netanyahu knows he cannot be perceived as taking America’s irreplaceable assistance for granted. At the same time, however, he may believe that any Arab diplomatic initiative has limited near-term prospects since the war is not ending anytime soon. Thus, he might have a different course in mind.

Currently, Netanyahu’s poll numbers are quite poor, so he will avoid going to elections in the near term if possible—even though 63 percent of Israelis reportedly want to hold them now. If forced into a political campaign, however, he would presumably present himself as Israel’s guardian against any U.S. push for a Palestinian state, which he contends would make the country more vulnerable.

Whatever the case, Israel is still at war, and America remains its lone superpower ally. Leaders in Jerusalem and Washington should therefore look for ways to keep political disputes from creating vulnerabilities that their common adversaries can exploit.

David Makovsky is the Ziegler Distinguished Fellow at The Washington Institute and director of its Koret Project on Arab-Israel Relations.