Only a month ago, Israeli politicians were preparing to dissolve parliament and call early elections that would likely have given Prime Minister Benjamin Netanyahu’s Likud party a clear victory. Then, in one of the most surprising political moves in recent Israeli history, Prime Minister Netanyahu struck a deal with Kadima leader Shaul Mofaz to form a unity government that will govern for a further 18 months.

The unity government provides stability as Israel faces the existential threat of a potentially nuclear-armed Iran. Prime Minister Netanyahu now has room to breathe and can set the political agenda with tighter control over the religious and nationalist groups within his coalition. Upon signing the unity deal between Likud and Kadima, there was hope that Mofaz would pull the government to the centre, helping to reform national and military service, the system of democracy, and kick starting the Middle East peace process. There have been positive signs that the government are willing to moderate and make concessions; a deal was signed with Palestinian prisoners to improve conditions, and following a request by Palestinian President Mahmoud Abbas, the bodies of 100 Palestinian terrorists buried in Israel were returned to the Palestinians.

More recently, the Israeli government made clear it would uphold the rule of law and evacuate several homes in the Ulpana outpost built illegally on Palestinian owned land. Just as it looked like the prime minister was becoming more moderate, he announced plans to build hundreds of new homes for settlers in the West Bank. This decision has led to widespread international condemnation, and acute pessimism about the growth of settlements and status of the peace process.

This decision can be considered in the context of Likud; settlers and their supporters are a key constituent of the party, and by green lighting new buildings the prime minister secures the loyalty of a strong power base that could cause him considerable political pain. There is also a clear and brutal message to the court and those who take settlers to task over illegal buildings- if homes are destroyed, new ones will replace them, and in much greater numbers. Or seen another way: the prime minister calls the shots on settlements and security.

In a less well covered, but possibly more significant move, Prime Minister Netanyahu has also decided to setup a ministerial committee to authorise new settlement building, taking away at least some of the responsibility previously held by Defence Minister Ehud Barak. This could indicate building new homes in settlements is going to become significantly easier, although it may be a shrewd move to appease settlers, amongst who Barak is deeply unpopular, giving the prime minister greater political capital to invest in other endeavours, whilst reducing the threat to his own leadership.

The new buildings could also signal a move further to the right and a new vigour for settlement construction, which would be catastrophic for all involved in the peace process. However, we may be witnessing a temporarily increase in settlement construction prior to an eye-catching settlement freeze. Having clearly shown settlers he supports them and will not abandon them, the prime minister can make an argument he is the only person capable of making a peace deal that secures their long-term future within Israel’s borders, winning new political capital for negotiations. This may be unlikely, but it is not impossible.

With the United States due to hold presidential elections later in the year, the Israeli prime minister only has a temporary window of opportunity to support settlements, and if Barak Obama is re-elected the pressure for a settlement freeze will increase significantly. As paradoxical as it may sound, by consolidating his power and increasing the building of settlements, Prime Minister Netanyahu may be clearing the way to make a historic deal that so many before him have tried but failed to achieve.

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