Who will be the next Prime Minister of Israel after the next election?
I assess a modestly improved chance relative to the market that Benjamin Netanyahu will be sworn in as Israel's next Prime Minister after the scheduled 27 October 2026 election, but the outcome remains highly uncertain and contingent on legal, coalition, and security developments.
Analysis
The market currently prices "Yes" at about 33.5%, implying a one-in-three chance, but the event has substantial liquidity and attention which suggests prices incorporate a wide range of scenarios; I set a higher probability (40%) because Netanyahu's historical resilience and party infrastructure give him a meaningful path to return even from difficult polling positions. The large event volume indicates market participants are actively trading on developments, so prices will likely move as legal rulings, primary results, and coalition signals emerge between now and the election.
Historically Netanyahu has demonstrated an ability to survive political and legal storms, retain loyal voters, and dominate Likud internal politics, which are strong structural advantages heading into any election; incumbency (or near-incumbency) provides organizational, fundraising, and media advantages that tend to compress downside tail risk for a veteran leader. Conversely, Israel's recent years have shown that coalition arithmetic matters more than raw vote share, with small religious and nationalist parties often holding kingmaker power and the opposition increasingly capable of building broad anti-Netanyahu alliances; this makes the path to the premiership fragile and sensitive to even small changes in party seat distributions.
Legal and judicial processes are the single most important wild card: ongoing indictments, court rulings, plea negotiations, or convictions could materially change the willingness of potential coalition partners to accept Netanyahu as prime minister or could lead to legal obstacles to appointment, and such events could happen well before the election or during the post-election government formation period. External shocks — for example a major security escalation, a diplomatic crisis, or a significant international response to domestic judicial reforms — could rapidly change voter sentiment and the willingness of parties to join a Netanyahu-led coalition, either improving or worsening his chances depending on perceived leadership performance.
Given the election is five months away, the most actionable factors to watch are (1) Likud primary results and internal unity, (2) opinion polls about both Likud and the overall right-religious bloc, (3) any major legal rulings with finality before government formation, and (4) signals from potential coalition partners about acceptability thresholds; these variables create scenarios ranging from a clear Netanyahu-led majority to narrow margins where one or two defecting MPs or parties decide the outcome.
Arguments
For
- Netanyahu has repeatedly demonstrated political resilience and the ability to bounce back from setbacks.
- He benefits from a durable personal vote and strong party machinery that mobilizes supporters effectively.
- The fragmented nature of Israeli politics often gives outsized bargaining power to small parties willing to back him.
- Incumbency-related advantages such as visibility, access to state institutions, and established donor networks favor his prospects.
- Security events can consolidate right-wing support and make coalition partners more likely to accept his leadership.
- Even if he does not win the largest individual party plurality, he could still be appointed premier if he secures coalition commitments.
Against
- Ongoing legal exposure could produce a conviction or final ruling that undermines his acceptability to potential partners.
- Growing public fatigue and broad anti-Netanyahu sentiment could drive voters to alternatives and boost opposition unity.
- Right-wing rivals or a successful internal coup within Likud could remove him as the party's standard-bearer.
- Small kingmaker parties may extract prohibitive concessions or refuse to join any government led by Netanyahu.
- International pressure or diplomatic isolation could make some coalition partners wary of backing him for fear of repercussions.
- A cohesive opposition coalition with a clear alternative leader could attract centrist voters and deny Netanyahu a governing majority.
Key drivers
- Likud's absolute seat count in the Knesset and Netanyahu's control of Likud's leadership and candidate list.
- Degree of unity among the right-religious bloc and willingness of small parties to back Netanyahu as premier.
- Outcome and timing of any major legal decisions or plea negotiations related to Netanyahu's indictments.
- Opposition coalition coherence and whether anti-Netanyahu parties can coordinate a majority and agree on a single candidate.
- Public response to security incidents or military operations between now and the election, which can boost incumbents.
- Voter turnout dynamics, particularly among Arab and center-left constituencies whose mobilization can change seat math.
- President of Israel's post-election mandate decisions and the informal bargaining process for forming a government.
- International diplomatic pressure or incentives (from the US, EU, etc.) that could influence coalition partners' calculus.
Risk factors
- A definitive criminal conviction or judicial ruling that significantly reduces coalition partners' willingness to accept Netanyahu.
- A credible internal challenge within Likud that replaces Netanyahu as the party leader before the election.
- A united opposition that successfully forms an agreed post-election coalition or rotation agreement excluding Netanyahu.
- A significant security development that erodes public confidence in Netanyahu's leadership and reduces his vote share.
- Low turnout among Netanyahu's base due to fatigue, complacency, or internal splits within the right-wing electorate.
- Fragmentation of the right-religious bloc leading to fewer combined seats and loss of kingmaker partners.
- International diplomatic measures or sanctions that increase domestic political pressure against Netanyahu-led coalitions.
- Health or personal issues affecting Netanyahu's ability to campaign or serve effectively as prime minister.
Scenarios
Best case
Netanyahu wins or leads the largest party with clear pre- or post-election commitments from kingmaker religious and nationalist parties, survives any legal uncertainty through delays or negotiated outcomes, and is formally appointed and sworn in as Prime Minister after the October 2026 election.
Most likely
A close, contested election produces narrow seat margins that force extended negotiations, with a roughly even chance that Netanyahu can piece together a fragile coalition but also a substantial chance that opposition parties or a rival right-wing leader assemble a majority; the final outcome hinges on coalition bargaining and any legal developments during the formation window.
Worst case
A combination of a damaging legal ruling, an erosion of Likud support, and a unified opposition coalition leads to Netanyahu being unable to secure the president's mandate, and either another leader is sworn in or no new government is formed by the December 31, 2027 cutoff causing this market to resolve to "Other."
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