The lightning transition from ugly mudslinging to the beginning of a beautiful friendship between Prime Minister Benjamin Netanyahu and Kadima leader Shaul Mofaz left even the most cynical Israelis gaping in open-mouthed incredulity.They had gone to bed on a Monday mulling the rough and tumble of new elections in September and woken up on Tuesday with one of the biggest coalition governments in the country’s history. So what is going on in the arcane world of Israeli politics? Why did Netanyahu suddenly call early elections and then with even greater alacrity change his mind? Netanyahu had many good reasons for an early ballot. Mainly, he wanted to be reelected before US President Barack Obama in November and avoid potentially embarrassing American pressure on the Palestinian issue in the run-up to the scheduled general election in October 2013.He had in mind two disconcerting models of decisive action by American presidents, no longer concerned about the Jewish vote, influencing the outcome of elections in Israel: George Bush the elder holding back loan guarantees in 1992, leading to the defeat of Likud incumbent Yitzhak Shamir, and a second-term Bill Clinton forcing West Bank land concessions, helping to drum Netanyahu himself out of office in 1999.Looming showdown On the horizon he could see a showdown over dismantling the illegal Ulpana and Migron outposts in the West Bank. If he defied the Supreme Court and allowed the settlers to stay put, he would be tarred by the center left as an undemocratic settler lackey; if he evacuated the settlers, the far right-wingers in the party would tear the Likud apart. Suddenly, for Netanyahu the election run-up did not look so smooth. Then, in the midst of it all, he was offered a less risky and much better alternative: a grand coalition, which with Kadima and its 28 Knesset Members, commands the loyalty of 94 of the 120 MKs.The broad coalition would solve most of the problems that had led him to call elections in the first place. It would enable him to resist US pressure on the Palestinian track or go along with the US in a genuine new peacemaking effort. He would be able to pass the austerity budget with virtually wallto- wall parliamentary support.As an added bonus, he could also finally destroy Kadima as a serious governing alternative.In the first instance, it would be widely depicted as no more than a pale shadow of the Likud. Then he could deliver the coup de grâce by incorporating it in Likud to offset the troublesome far-right and give his party the more centrist image he seeks. If he brings that off, it would be a reversal of the so-called “big bang” in 2005. Where Ariel Sharon left Likud because of the far right, Netanyahu would be bringing the breakaway centrists back into the fold as a counterbalance to growing right-wing power.The new Kadima leader actually initiated the deal, which could herald his party’s demise.In the short term, Mofaz saved himself and his party from what polls were predicting would be an electoral disaster. And in a bid to salvage some pride, he claimed that in seeking refuge in Netanyahu’s government on Netanyahu’s terms, he was setting a new national agenda.The broad coalition, he insisted, could facilitate three historic achievements: new legislation to put an end to the wholesale exemption of the ultra-Orthodox from military or national-civic service; a new electoral system to guarantee stronger and more stable governance; and renewal of peace-making on the Palestinian track.Netanyahu could use Kadima as a fig leaf to do nothing on all fronts and continue operating as he has done for the past three years in survival mode, or he could go for grand sweeping action of potentially historic import. There are no more party political or coalitionary excuses. Together with Kadima and Defense Minister Ehud Barak’s fivemember Atzmaut faction, he has the support of 60 Knesset members or half the Knesset.For the Haredi draft and changes in the election system, he can count on Foreign Minister Avigdor Liberman’s Yisrael Beyteinu to get him comfortably across the line. On peacemaking with the Palestinians, he can rely on Labor and Meretz to back him from outside the coalition.Intentionally or not, Netanyahu now has a platform to do great things. But will he have the political will to take on the far right over peacemaking with the Palestinians? And will he have the courage to compromise his historic alliance with Shas over the Haredi draft and electoral reform? The proposed new electoral system would have the leader of the largest party automatically declared prime minister, introduce an element of regional-constituency balloting and gradually raise the threshold for entry into the Knesset to around four or five percent of the popular vote. All of this is designed to create two large political blocs at the expense of the smaller and special interest parties and will be opposed tooth and nail by parties like Shas. Just the clause naming the leader of the largest party prime minister gives Shas leaders nightmares: Religiously conservative right-wingers considering voting Shas, but who want Netanyahu as prime minister, would almost certainly choose to vote Likud.Restructuring Electoral reform or not, the establishment of the grand coalition will inevitably lead to a fundamental restructuring of Israeli politics.New center parties and a resurgent Labor will vie for the political space vacated by Kadima. All the key players, former Kadima leader Tzipi Livni, media personality Yair Lapid and Labor’s Shelly Yachimovich will be buoyed by a new round of social protest in the summer, and even more so after the new government’s austerity budget.For Netanyahu, playing for mere survival could become a dangerous game, as the center left opposition gains momentum.Of course, all this would be overshadowed by an Israeli strike against Iran’s nuclear facilities. Indeed, some analysts believe the main reason for the grand coalition was to create a broad basis of support for such an attack, even in the face of American opposition.That logic is undermined by the fact that Mofaz, who joins a kitchen cabinet of nine, is staunchly opposed to a strike. At the moment, the other eight are said to be equally divided. If Mofaz stands firm, his vote would tilt the balance against a strike.But then again consistency has not been his strong suit.As new political forces coalesce inside and outside the grand coalition, the election showdown, it seems, has been deferred to late 2013. There is time for Netanyahu to do great things. And time for new leaders on the center left to grow in stature and mount a serious challenge if he doesn’t.Netanyahu also wanted to be reelected before having to pass a tough austerity budget in December. Doing so in the teeth of growing social protest in Israel could have hurt his reelection prospects.Third, he seemed a shoo-in for a snap September election. As he looked around him he could see no serious challenger for the premiership. By ousting Tzipi Livni in March, the main opposition Kadima had at a stroke lost its identity as the party of peace and cleaner politics, and was plummeting in the polls. There was no way Mofaz would be able to rebrand it by the fall.So why did Netanyahu change course? As he announced the early election at the Likud Convention a day before his about-face, he was shocked by the extent and fervor of far right-wing power in the party. The one thing he feared that could lose him the election would be the Likud being cast as the uncompromising radical Right serving narrow settler interests.