Washington is watching to see which way Prime Minister Binyamin Netanyahu moves as his government’s future is buffeted by threats by his coalition partners to bring him down.

Economy and Trade Minister Naftali Bennett is threatening to pull his 12-vote Bayit Yehudi party from the 68-member coalition (of 120 seats in Knesset) if the prime minister releases Israeli-Arab prisoners as part of a deal to continue peace talks into next year. An increasingly powerful farright wing of Netanyahu’s own Likud party is making similar threats.

Netanyahu might try to forge a new centrist coalition with the Labor party, but that might require a commitment to peace talks that he so far has been unwilling to make.

Moving in the other direction toward Shas, the Sephardi ultra-Orthodox party, is unlikely because it wouldn’t serve in a government with the secular Yesh Atid party (and vice versa), which advocates drafting haredi men into the army.

Watching with amusement and anticipation is Foreign Minister Avigdor Liberman, who has said he would prefer new elections over a new coalition. The Soviet-born leader of Yisrael Beytenu last week in New York predicted, “soon we may have a Russian-speaking prime minister.”

The usually bombastic Liberman is trying to create a softer and more statesman-like image after returning to the cabinet following acquittal on fraud and corruption charges.

The new Liberman was in Washington last week to meet with John Kerry and declared the secretary of state “a true friend of Israel.” That may reflect that Kerry treats him like a real foreign minister, unlike his predecessor, Hillary Clinton, who largely ignored him and preferred to work with then-defense minister Ehud Barak and others.

Liberman’s basic approach hasn’t changed, though. He still advocates transferring Israeli Arabs to the Palestinian state, largely by redrawing borders, and he thinks negotiating with Palestinian Authority President Mahmoud Abbas is a waste of time.

“We need to tell the truth: the Palestinians in general and Abu Mazen [Abbas] in particular are not interested in reaching an agreement with us,” he said.

Liberman also announced a no-fault divorce after his party’s brief marriage with Likud. The two ran on a joint ticket last year with disappointing results.

Likud is deeply split with a far-right faction led by deputy defense minister Danny Danon, chairman of the party’s central committee and Netanyahu’s nemesis, threatening to break away if the prime minister goes ahead with the release of Israeli Arabs. Likely to join him are two other deputy ministers and the coalition chairman, among others.

Bennett has been taunting Netanyahu, asking, “Who’s the prime minister, Bibi or Abu Mazen?” He wrote to the prime minister calling for the cabinet to debate his Plan B to end all talks with the PA and annex the major settlement blocs. “We are witnessing the end of the diplomatic process” and “the time has come for new thinking.”

Justice Minister Tzipi Livni, Israel’s chief negotiator in title if not in fact, said Bennett’s “new thinking” would be disastrous for Israel. She had in mind him and his colleague, Housing Minister Uri Ariel, when she said, “There are some in the government who aren’t interested in peace, who are for one state.” She accused them of encouraging violence by radical settlers and extremist yeshiva students “who want to prevent peace.”

She also accused Ariel of “deliberately” trying to sabotage the peace talks by reissuing 708 tenders for new settlement construction in the Gilo neighborhood of east Jerusalem.

Kerry cited that announcement as a major factor in the breakdown of the talks.

Bennett, 42, is a multimillionaire software developer who made his fortune in the United States before returning to Israel about a decade ago. His ultra-nationalist party is the successor to the National Religious Party. His Plan B also calls for giving Gaza to Egypt and letting the PA control non-security functions in the parts of the West Bank Israel does not annex. Bennett, whose parents made aliyah from San Francisco right after the 1967 war, renounced his US citizenship last year after being elected to Knesset.

Liberman has said he would welcome Bennett’s exit but he doubts the economy minister will go through with his threats. Interestingly, both Liberman and Bennett served as Netanyahu’s chief of staff before leaving Likud to launch their own parties. Both, of course, would like to succeed him.

Netanyahu’s first administration in 1999, like Yitzhak Shamir’s government in 1992, was brought down by threats from farther-right coalition partners, leading to the election of Labor-led governments. Labor party and opposition leader Isaac Herzog is hoping history will repeat itself.

I don’t believe Netanyahu or Abbas really want to make the kind of peace the other can accept, but I do believe they want to continue their dialogue because it is very much in their mutual best interest. Perhaps most important is security cooperation, specifically their alliance to prevent Hamas from destabilizing the West Bank and possibly taking control of the PA. For all his talk about reconciliation with Hamas, Abbas knows the Islamist militant group is a far greater threat to his and the PA’s survival than Israel is.

He’s just scared to say so.

Meanwhile both leaders will keep trying to make the other’s life miserable by ratcheting up sanctions. Israel’s are primarily economic and local and are the most painful. The Palestinians’ are political and diplomatic and also very troubling.

Kerry originally set an April 29 target date for completing peace negotiations, now he just wants to get an agreement to keep talking for another nine months if for no other reason that talking beats shooting any day. Much, of course, will depend of what kind of Israeli government emerges from the latest round of infighting in Jerusalem.

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