The wonders of Israeli politics. On Tuesday, after weeks of negotiations, the establishment of a national unity government with Zionist Union seemed imminent. Everything was set – party leader Isaac Herzog would fill the vacant seat of foreign minister, while other top party members would somehow be compensated for having to swallow an uncomfortable alliance with their Likud rival.A day later, though, the plan went up in flames. Yisrael Beytenu head Avigdor Liberman, who since the election last year has unremittingly attacked Prime Minister Benjamin Netanyahu, made a 180-degree political flip and seemed on the verge of bringing his party into the coalition.Under the plan, Liberman would get the defense portfolio, putting into question what would happen to Moshe Ya’alon, the current defense minister, who just made peace with Netanyahu on Monday for breaking ranks with him over freedom of speech in the IDF.Confused? It’s understandable.Since last year’s election, Netanyahu has spoken often about the need to expand the government, even though the current coalition of 61 MKs has its advantages. Unlike the previous government, which included Tzipi Livni, Yair Lapid and Naftali Bennett, who fought daily over issues such as the peace process and religious inequality, this time around there was barely any political bickering.A narrow coalition, though, has its difficulties. Missed votes and political extortion by one or two MKs with the ability to torpedo legislation were enough of a reason for Netanyahu to want to expand his government. His plan to pass a two-year budget bill in the near future only reinforced the need for more hands that will vote with him.In addition, a new government was also supposed to provide Netanyahu with some international political cover, although that would have been the case only with Herzog, not Liberman. Bayit Yehudi officials were already quoted Wednesday afternoon praising the possible addition of Yisrael Beytenu and the establishment of the “most right-wing government in Israel’s history.” That might be a cause for celebration within Bayit Yehudi, but not throughout the world.Anyone who had hoped the French initiative would move Israel in the direction of peace negotiations with the Palestinians can likely forget about that happening. A new government with Liberman as defense minister could turn Israel even more rightward, making Netanyahu’s job of managing a delicate diplomatic situation even more difficult. If Bennett, who completely rejects the establishment of a Palestinian state, moves to the Foreign Ministry, that job will become even more complicated.From a political perspective, it makes sense bringing Liberman into the government instead of Herzog. Had the Zionist Union joined, Bennett would have likely left the government at some point down the road and then positioned himself, from the opposition, as an even bigger right-wing rival to Netanyahu.If Liberman joins instead, Bennett will not have an obvious reason to leave. But that is all political logic.Diplomatically, such a government will have a difficult time maneuvering between the demands for Israeli concessions on the Palestinian front, staving off potential sanctions on settlements from the European Union and ensuring the Obama administration continues using its veto to knock down anti-Israel resolutions at the United Nations.How this new government looks – assuming it ultimately comes together – is still unknown, and while a larger coalition might make it easier to pass legislation in the Knesset, Israel’s diplomatic challenges are about to become a bit more difficult.