23
Two days after losing the election, Benjamin Netanyahu was searching for a new house in Jerusalem. The apartment he had recently bought in Rehavia was not large enough to host guests in style. Besides, Bibi and Sara felt their standing warranted a private home, a status symbol in the cramped city. But the economic boom of the past decade had put the kind of house they had in mind in a central neighborhood out of the price range of a man who had lived for the past fifteen years on a government salary and the munificence of his wealthy friends.
As he traipsed after the estate agent, viewing desirable residences in the upscale German Colony of Jerusalem, and meeting polite, quizzical smiles when he asked the sellers for a discount, Netanyahu realized he would have to go through with his plan to make a clean break from politics for a while. By Israeli law, MKs are prohibited from having outside employment to parliamentary duties. Unlike previous prime ministers, who had retained their seats after losing an election, Netanyahu announced his resignation from the Knesset. He consoled himself that it was only a short break from politics to obtain financial security for his family, and he would soon be back in power.
On one count at least, Netanyahu was right. His successor, Ehud Barak, would have the shortest term of any prime minister in Israel’s history. Barak had been marketed as the antithesis to Bibi. If anything, he was the upgrade. Barak would lose his staff, fall out with his coalition, bomb out in negotiations with the Palestinians and Syria, and be dumped by the electorate in half the time it had taken Netanyahu.
Barak’s energetic and brash approach to the two diplomatic processes was the opposite of Netanyahu’s hesitant and cagey one. Within six months of taking office he was at Shepherdstown, West Virginia, for talks with Syria’s foreign minister. Six months later there was another full-blown summit with the Palestinians, this time at Camp David.
Barak believed he could cross the finish line and deliver a peace deal with Syria and permanent status agreements with the Palestinians. He had Bill Clinton’s full backing. Nevertheless, he totally failed. Neither Hafez al-Assad nor Yasser Arafat had ever been prepared to go the final mile and resolve the conflict, or, just like Egypt’s Anwar al-Sadat, they were simply incapable of compromising on anything less than every inch of territory captured by Israel in 1967. Both negotiations failed spectacularly.
The Oslo veterans had advised Barak not to rush headlong into an all-or-nothing summit with Arafat. But he wasn’t one to heed advice. Clinton had some misgivings, but nearing the end of his presidency and on his fourth Israeli prime minister, he was anxious to seal his Middle East peace legacy.
By the time Barak took off for Camp David, he had lost all but one of his coalition partners, leaving him with a minority government. A year after his confident victory, his administration was falling apart.
What was it about this new generation of Israeli leaders, Bibi and Barak? They were self-confident and suspicious and impervious to counsel, efficient as campaigners, yet incapable of building anything resembling a harmonious team or maintaining a stable coalition once in power. There seemed to be something in the Sayeret Matkal DNA that transformed its officers into secretive solo operators who were focused on their targets but oblivious to their surroundings.
NETANYAHU HAD NO time to gloat over his successor’s misfortune. Three months after leaving office, the police began an investigation against him over charges that the prime minister’s office had paid a Jerusalem contractor, Avner Amedi, nearly half a million shekels to settle Netanyahu’s outstanding bill. According to allegations published in Yedioth Ahronoth, most of the bill was for private services such as renovations performed at the Netanyahus’ residences. It was alleged that Amedi had also carried out similar services for Sara’s parents.
Amedi’s demands for payment had been ignored for years—until Netanyahu was elected prime minister, when the contractor suddenly became the recipient of lavish government contracts from his office. As the investigators dug dipper, they discovered that one of Amedi’s last contracts had been to box up and remove, on Sara’s instructions, the contents of a room containing hundreds of gifts Netanyahu had received during his term as prime minister. By law, the gifts were state property. Police, accompanied by media camera crews, raided the Netanyahus’ private residence, taking a case of documents. Seven hundred gifts were repossessed by the state; another 150 had disappeared.
For a year Bibi and Sara remained under the shadow of a criminal investigation, with the results threatening to land them in court and prevent his political comeback. “They are afraid I will return,” he complained to sympathetic journalists. Once again he blamed an unholy alliance of leftist law-enforcement and media. Passing a photograph of Yitzhak Rabin in the corridor of the police headquarters, he said to the officers, “I know you’re all leftists.” The couple claimed to have been unaware of the government contracts awarded to Amedi and insisted that they believed the gifts were legally theirs.
The media, which previously had gleefully reported on Sara’s passion for goody bags, and the monthly budget at the prime minister’s office of 11,700 shekels for Bibi’s favorite Cuban cigars, continued to show a keen interest in the couple’s greediness. Bibi had been known for years in Jerusalem restaurants as someone who left others to pay the bill. Sara was his perfect partner in entitlement. But while the majority of the media may have been hoping for the investigations to seal Netanyahu’s political demise, the scandals were having little effect on the right-wingers, who were beginning to pine for him.
As in the Bar-On Hebron case, the police recommended an indictment. The state prosecutor concurred. But the attorney general, Elyakim Rubinstein, once again overruled the prosecutor, saving Netanyahu with his ruling on September 27, 2000. There was insufficient evidence to secure a conviction, he said. Rubinstein, however, did condemn Netanyahu’s conduct as “ugly,” and remarked on the “insufferable ease” with which he had ignored the norms expected of a public servant.1
Tzila Netanyahu didn’t live to see her son and daughter-in-law cleared. The young woman who had written poems and studied law and then devoted her life to her husband’s and sons’ careers passed away on January 31, 2000. Shortly beforehand, she told one of her friends that “87 years [was] enough.” Even in death she became part of Yoni’s pantheon. On her tombstone was written, “In upstanding glory, she bore the grief of the falling of her son Jonathan, of the noblest of heroes of the state of Israel in all its wars.”
Tzila’s death, taking place at a low point in Bibi’s career, was a rebuke to him, a reminder of how his parents were never fully satisfied, even by his greatest success. Benzion, with his habitual bluntness, had criticized his son’s term in office, saying in a rare interview in 1998, “He doesn’t know how to develop manners to captivate people by praise or grace,” and “He doesn’t always succeed in choosing the most suitable people.” Praising his son’s statesmanship, Benzion said, “He may well have been more suited as foreign minister than head of state. But at this moment I don’t see anyone better.” These words led Netanyahu’s critics to say, unfairly, that even Bibi’s father didn’t think he should be prime minister.2
Netanyahu was determined to return to office and prove his father and everyone else wrong. Meanwhile, he needed to make money. For three and a half years as a private citizen, Netanyahu was on the lucrative circuit of ex-presidents and prime ministers making the rounds as “consultants” for international companies, giving private “talks” to billionaire businessmen, and lecturing for high fees, which in his case went as high as $60,000 for a single appearance. He has never released his financial records and is not required to do so by Israeli law, but the Israeli business press assessed his earnings during that period at around 15 million shekels (about $3.7 million). The family remained in their Rehavia apartment, but in 2002 they bought a 5 million shekel weekend villa by the sea in exclusive Caesarea.3
The Israeli media compared Netanyahu’s hedonism unfavorably with the frugality of David Ben-Gurion and Menachem Begin, as well as with Peres and Rabin, who lived off their government salaries. Netanyahu’s assets, consisting primarily of the family’s two homes and those inherited by Bibi and Sara from their parents, was estimated by Forbes Israel in 2015 at around 42 million shekels (about $11 million),4 similar in scale to estimates for contemporary Israeli leaders’ assets. Ehud Barak in his periods outside politics was on the same circuit. Ariel Sharon built up one of the largest cattle farms in Israel. Until the law forbade MKs to have extra-parliamentarian business interests, Ehud Olmert enjoyed income from his successful law firm. And all four of Israel’s most recent prime ministers have been investigated for corruption.
A YEAR AFTER LEAVING office, Netanyahu made his first political intervention. In a television interview, he slammed Ehud Barak, who was then at the Camp David summit with Arafat and Clinton, for his proposals to pull back from 90 percent of the West Bank and share parts of East Jerusalem with the Palestinians. When asked whether he was speaking as a politician, Netanyahu answered, “I’m speaking as a concerned citizen.” The Israeli media has lampooned him ever since as “the concerned citizen,” but it was a clear signal both to his supporters and his rivals. As the months passed, he began making more media appearances, usually with “soft” interviewers, such as the credulous talk-show host Yair Lapid, to whom he said, in February 2002, that he was traveling the world to present Israel’s case: “I’m not interested in the money, as you well know.”
In between business trips, Netanyahu was working on rehabilitation. His diary was full of meetings with Likudniks, journalists, and even senior members of other parties. The monologue he delivered included assurances that since his downfall he had learned “to listen,” and that “I am not working on my own.” In meetings with settlers and far-right activists who had attacked him for signing the Hebron and Wye agreements, he explained that he had implemented “an interpretation of the [Oslo] Agreement that would allow me to stop the gallop to the ’67 lines.”5 Most on the right, especially the old Revisionists, were forgiving, and still saw in him their best hope of blocking Barak’s plans. Not that Barak was getting anywhere with them.
After fourteen days, the Camp David summit ended with the Israelis and the Palestinians incapable of bridging their differences. “I’m a colossal failure, and you’ve made me one,” Clinton told Arafat bitterly.6
In one year’s frenetic activity, Barak had been on the brink of deals with the Palestinians and Syria. Keeping his election promise, he had pulled the IDF out of the “Security Zone” in southern Lebanon in early June. But without an agreement with either Syria or Lebanon, the pullback was disorderly, and Israeli posts were soon taken over by Hezbollah, crowing over how they had “banished” the mighty Israeli army.
The shine had gone off Barak’s premiership, but the very thought of Likud leader Ariel Sharon replacing him still seemed outlandish. Even within Likud, few regarded him as more than a caretaker. He had won the leadership primary in 1999, beating Ehud Olmert with 53 percent of the vote, but this was largely due to Netanyahu’s supporters backing him, in the belief that the seventy-one-year-old pariah would never be an obstacle to Bibi’s return. But Sharon was playing a long game. He was lulling Netanyahu into a false sense of security while transforming his old image as a warmonger into that of a benevolent grandfather.
Sharon’s team of advisers now included Eyal Arad, Netanyahu’s old press officer, who had sworn to keep his old boss out of office, and Arthur Finkelstein, who had been hired once again by Likud to advise the impending election campaign. It was Finkelstein, who was still convinced that Jerusalem was a winning issue, who urged Sharon to make a visit to the Temple Mount on September 28, the day before Rosh Hashanah. Sharon’s tour of the contested Haram al-Sharif compound was intended as a challenge to the Barak government, but it sparked off a wave of Palestinian riots. The rioting quickly spread throughout the West Bank and Gaza as well as to some Palestinian-Israeli communities within the Green Line (the pre-1967 border).
As the spontaneous rioting gave way to gunfights between the IDF and Palestinian militias, Israel’s intelligence services argued over whether Arafat was orchestrating the violence or merely taking advantage of it. It made little difference. The Second Intifada was to rage for another four and a half years, until after Arafat’s death. In the last months of his administration, Clinton, as a lame-duck president, made a last-gasp attempt to forge an agreement, bringing Barak and Arafat together for meetings in Paris and the United States. Both sides “accepted” the “Clinton parameters,” though with significant reservations. But it was too late. Barak was going down. The Second Intifada was the death knell of his government and of the Oslo process.
ON NOVEMBER 28, Barak was forced to admit that he had no mandate to remain in power. “You want elections? I’m ready for elections,” he said in the Knesset, adding that he had won every election he had run in.7 Which was exactly what Netanyahu had said two years earlier. Likud now had to decide between its leader and its leader-in-exile.
Under the direct-election law, the very law that Netanyahu had defied Likud over in 1992, providing the crucial vote that passed it, a special election for prime minister could be held without dissolving the sitting Knesset. Now Barak would use that same law to prevent Netanyahu’s return.
Having resigned from the Knesset, Netanyahu could not run for prime minister. After coming under fire from the opposition for blocking his opponent, Barak agreed to pass an amendment that would allow candidates who were not MKs also to run for prime minister. But he still refused to dissolve the Knesset. On December 13, the Knesset overwhelmingly passed the “Netanyahu Law.” Netanyahu’s path back to power was clear. The polls gave him a clear edge over a plummeting Barak.
At that point, Netanyahu made the biggest miscalculation of his political career. He had left Likud after the 1999 elections with only nineteen seats. That would be insufficient, he reasoned, to build a stable coalition and remain in power for more than a few months. “I can be prime minister in sixty days… but with this anarchy and internal paralysis nothing can be achieved,” he insisted.8 He would only run if elections for a new Knesset were held as well. Sharon was loath to give up his leadership, but Likud and most of the other opposition parties supported Netanyahu’s demand. Shas didn’t.
The ultra-Orthodox party on which Netanyahu had lavished so many resources and so much energy during his first term had come close to overtaking Likud in 1999, winning seventeen seats, having attracted many of Likud’s traditional voters. Well aware that they would struggle to repeat that performance, the leaders of Shas refused Netanyahu’s entreaties to vote in favor of dissolving the Knesset. Everyone expected Netanyahu to go back on his word and run for prime minister anyway. The opportunity seemed too good to resist. But Netanyahu was convinced that no matter who won the direct election, with the current Knesset, another election would happen in a matter of months. Had he decided to run, he would almost certainly have been back in office less than two years after leaving. The miscalculation meant it would take him eight more years.
As Barak and Sharon squared off, the polls indicated that a majority of Israelis still found it hard to contemplate Sharon, the man who had been blamed with pushing the country into a disastrous war in Lebanon, as prime minister. But the intensifying Second Intifada, coupled with what many saw as pointless talks continuing with Arafat, ate away at Barak’s support. With the slogan “Only Sharon Will Bring Peace,” and footage of him on the farm hugging grandchildren and feeding lambs, Likud’s campaign repackaged the angry old warlord as elder statesman.
Labor, in vain, tried to remind voters of all the times Sharon had dragged Israel into some very bad corners. They even distributed hundreds of thousands of mock emergency call-up papers, for the “next war” Sharon would bring. Barak’s defeat was crushing. On February 6, 2001, Sharon won with 62 percent of the vote.
Israelis hadn’t given up on peace. They had given up on the young generation of leadership represented by Barak and Netanyahu, in favor of a member of Rabin and Peres’s generation. Barak’s abbreviated term wasn’t just the end of the Oslo process, it was the end of Labor’s image as Israel’s responsible party of government. For Labor, Barak’s defeat opened a prolonged period of constant infighting, low election results, and Likud dominance.
“YOU DIDN’T WANT him as defense minister, you’ll get him as prime minister,” said Ariel Sharon’s hagiographer, Uri Dan, after Sharon had been forced to resign as defense minister in 1983.9 It had taken Sharon eighteen years to fulfill that prophecy, and he had no plans to serve only as interim PM. Defying Netanyahu’s predictions, he succeeded in forming a stable coalition with Labor. The rivalry between him and Netanyahu, who was making no secret of his intention to run in the next leadership primary, was out in the open.
As the Second Intifada grew more bloody and suicide bombers returned to Israel’s streets, Netanyahu asked in an interview, “How have we reached the situation that every day there is an industry of murder here?” Sharon’s people said that “Bibi is inciting against Sharon, just like he incited against Rabin.”10 Sharon refused to negotiate with the Palestinians as long as the violence continued. Netanyahu went one step further and called for Arafat to be deported.
After Al Qaida terrorists flew planes into the World Trade Center and the Pentagon on September 11, 2001, Netanyahu was eager to reprise his role as the American media’s terrorism expert. His first reaction, recorded by the New York Times, wasn’t particularly well-phrased. When asked “what the attack meant for relations between the United States and Israel,” he said, “It’s very good.” He then backtracked: “Well, not very good, but it will generate immediate sympathy.” He said it would “strengthen the bond between our two peoples.”11
Netanyahu would claim that he had predicted the 9/11 attack in one of his books on terrorism. What he had actually written was that if the West didn’t wake up to threats, “in the worst of such scenarios, the consequences could be not a car bomb but a nuclear bomb in the basement of the World Trade Center.”12
A year after the attacks, he appeared before a congressional committee to support President George W. Bush’s plans to launch a war against Iraq. In a rare, for Netanyahu, reference to Menachem Begin, he recalled how Israel in 1981 had attacked the Iraqi nuclear reactor: “Two decades ago it was possible to thwart Saddam’s nuclear ambitions by bombing a single installation. Today nothing less than dismantling his regime will do.”13
On the eve of Netanyahu’s first visit as prime minister to Washington back in 1996, a group of neoconservatives, including Richard Perle and Netanyahu’s old friend Doug Feith, calling themselves the “Study Group on a New Israeli Strategy Toward 2000,” had published a paper titled “A Clean Break: A New Strategy for Securing the Realm.” The paper was presented as a policy report for Netanyahu and included recommendations for attacking Syria and Iraq. It wasn’t a paper Netanyahu ever seriously considered, and the “Study Group” was mainly using his name for their own publicity. Nevertheless, it has been used ever since as grist for the mills of conspiracy theorists eager to portray Bush’s “War on Terror” as a Zionist plot.14
Back home, Netanyahu continued to clash with Sharon, who was making intriguing hints in his speeches regarding a Palestinian state. Netanyahu, sensing the opportunity to score points, challenged Sharon to a vote in the Central Committee. “Self-rule for the Palestinians—yes. A state—no,” he thundered in his speech. “A Palestinian state means no Jewish state and a Jewish state means no Palestinian state.” Sharon in return mocked Netanyahu over his own conduct as prime minister, without mentioning his name. “The Oslo agreements were accepted by someone else,” he said, and it had been other prime ministers who “warmly, perhaps naively, shook Arafat’s hand. One of ours as well. I never shook Arafat’s hand.”15 Sharon lost the vote, with only 41 percent of the Central Committee members supporting him.
Sharon was careful not to open too wide a breach with Netanyahu. He even sent him that month on an official hasbara tour on behalf of the government to Israel’s supporters in Washington. But the showdown was inevitable. Netanyahu’s people were openly calling Sharon “Bibi’s predecessor.” When Sharon went to the United States in October 2002 to discuss with the Bush administration, among other matters, the impending Iraq war, and “the day after Saddam,” Netanyahu sneered, saying, “He won’t be prime minister after Saddam.”
As the primary neared, Netanyahu was confident he would be the first to ever depose a serving Likud leader. The party members’ dilemma was between Netanyahu, who appealed to their right-wing ideology, and Sharon, a more popular figure with the wider electorate. Three weeks before the primary, Sharon sprung a trap. On November 2, Labor had left the coalition, to put some distance between Labor and Sharon’s government before the election (which would be for the Knesset only, the experiment in direct elections abandoned). Sharon offered Netanyahu the Foreign Ministry, which had just been vacated by Peres. Netanyahu didn’t want to be seen endorsing Sharon’s policies, but turning Sharon down would look like refusing to serve the nation. Netanyahu accepted the post, while emphasizing that he was still running in the primary.
It was a master move by Sharon. Now Likudniks could vote for him as leader, confident that they would be getting Netanyahu as well, as part of the package. Sharon, on the other hand, had made it clear that if he lost, he would retire.
In the last days of the campaign, the veteran Revisionists rallied to Netanyahu. To them, Sharon, whose agrarian roots were in the hated Mapai, had always been a dangerous opportunist, without allegiance to Jabotinskean ideology. Among them was Moshe Arens, who reconciled with his wayward protégé. It wasn’t enough. Most Likudniks believed that Sharon was a better candidate for the general election.
On November 25, Sharon won the primary with 55 percent of the vote. For Netanyahu it was a second defeat, as crushing as losing to Barak in 1999. He had lost on his home turf, receiving only 40 percent of the vote.
ON JANUARY 28, 2003, Sharon’s Likud easily trounced Labor, which was under the short-lived leadership of the earnest left-wing former general Amram Mitzna. Likud had won thirty-eight seats, its best result in four elections (and one that under Netanyahu it has not surpassed).
Netanyahu expected to remain in the post that he had occupied for only two months, and was looking forward to transforming the Foreign Ministry into a hasbara-style propaganda organization. Sharon had another surprise in store. He appointed the bland Silvan Shalom as foreign minister and suggested that Netanyahu become finance minister. When Netanyahu objected, he was shocked to discover that he was being given no choice. Sharon’s motives were mixed. He had been itching to take Netanyahu down a notch, and now was his chance. But Sharon also believed that Netanyahu was the right person to take on the Israeli economy, which was reeling from a recession that had been caused by the burst of the dotcom bubble and the Second Intifada.
Netanyahu spent twenty-four hours mulling it over with his advisers in snowbound Jerusalem. He issued Sharon a long list of conditions and was surprised when they were all accepted, even his demand that a second minister be appointed beneath him in the Finance Ministry. Sharon promised Netanyahu full autonomy on all financial issues. In effect, he would be Israel’s “financial prime minister.” Just before he said yes, Netanyahu added another request—to be “designated acting prime minister.”
Israeli law doesn’t require prime ministers to designate a minister who will replace them, if for some reason they are unable to continue serving. Most have been averse to doing so. Sharon certainly didn’t plan to designate Netanyahu as his potential successor, and he turned down this condition. By then, Netanyahu had already agreed to take the job. Few noticed the next week, on the eve of the new cabinet’s swearing-in, when Sharon compensated the new industry, trade and employment minister, Ehud Olmert, who had believed that he would get Finance, with the “designated acting prime minister” title. It meant little at the time. Sharon was going nowhere.
Moving down the street to the Ministry of Finance, Netanyahu set about his new job with unexpected relish. It was the only time in his career when he was responsible for a specific field of policy, and it was a role he had always claimed to be uniquely capable of performing, as few Israeli politicians had a grasp on economics.
A firm believer in open markets and small government, Netanyahu accelerated the economic trends that were already in place, slashing corporate and individual taxes, cutting social benefits, and firing four thousand government employees (he likened the public sector to “a fat man being carried by a lean man,” the private sector). He privatized the national airline, El Al; the state shipping company, Zim; and the telecommunications giant Bezeq. He forced the banks to divest their pension divisions and phased out fixed-interest government bonds, releasing large sums of money for investment in, among other things, tech companies.
His policies showed swift results. Within two years, unemployment and inflation were down, the deficit was almost zero, and growth was up. Israel’s GDP grew between 2004 and 2008 by 5 percent or more annually. Deregulation of financial services opened up a new investment sector that had barely existed before.
However, the impact of Netanyahu’s thirty months in charge of Israel’s economy has been exaggerated. The country was put on the path to budgetary restraint and neoliberalism already in the mid-1980s, by the unity government headed by Peres, which had been forced to restructure the economy to rein in massive inflation. The Rabin government in 1992 had made the key investments that transformed the high-tech industry, making it Israel’s leading export sector. Long detached from its socialist roots, Labor’s economic policy going into the twenty-first century was not that different from Likud’s. After taking power in 1999, Ehud Barak implemented the budget that had been prepared by the Netanyahu government largely untouched. The Sharon government passed Labor’s budget in 2001 without change.
Netanyahu deserves credit for helping to create the conditions for Israel’s speedy recovery from recession, continuing the liberalization of its financial markets, and boosting the prosperity that was a factor in cushioning the Israeli economy during the global downturn from late 2008. However, had Netanyahu continued running the economy, some of the deregulatory plans he had yet to implement could have left Israel more exposed to the global storms. And a larger part of the credit for Israel’s economic success during Netanyahu’s period goes to the improvement in the security situation as the Second Intifada petered out and trade boomed.
Israel’s “left” is only left on matters of war and peace. On the economy, the “leftists,” who belong to the wealthier and more highly educated parts of Israeli society, tend to lean rightward. The Israeli media largely reflects the affluent upper middle class, which hated Netanyahu as prime minister, but loved him as finance minister. He spoke the language of the business press, and his image of success from that period is as much due to public relations as to results.
At the same time, Bibi had a tin ear for the concerns of those on the lower rungs who weren’t enjoying the prosperity. Poverty and inequality rates grew rapidly in that period, and those suffering the most were Likud’s traditional voters. “No one is helping the poor more than me,” he insisted, and he may have been right in the long term. But in the short term, his voters were hurting, and Netanyahu failed to even pretend that he felt their pain.
In July 2003, Vicky Knafo, a Likud-voting single mother, began a solitary march from Mitzpe Ramon, deep in the Negev, to Jerusalem, to protest the cuts in benefits to unemployed single parents. She drew a great deal of attention and sympathy, but Netanyahu complained that the media were “making a hero out of a woman who is walking all the way to Jerusalem. She probably does jogging every evening.”
Netanyahu was impervious to criticism. He had Sharon’s backing, and with the coalition’s support, he could push nearly all his reforms through the Knesset, drowning out the objections of his old allies from the ultra-Orthodox parties, whose voters were among the casualties. He would only realize much later that his policies had driven a wedge between him and his electorate.
AS NETANYAHU WAS busy being “financial prime minister,” the real prime minister was working on his own explosive policy. By mid-2004, the rate of suicide bombings within Israel was starting to decline. The Palestinian Authority was beginning to slowly reestablish security coordination, though Arafat remained isolated in his Ramallah headquarters. Israel was in advanced stages of the construction of a “separation fence,” in some places a concrete wall, within the West Bank, which was designed to keep the attackers out. Israelis had learned to live with the Intifada, but Sharon feared renewed diplomatic pressure on Israel to make concessions to the Palestinians. He was also anxious to deflect the media’s attention away from police investigations into his murky financial affairs.
In December 2003, Sharon unveiled his plan to unilaterally “disengage” from the Gaza Strip. To most Likudniks, the idea of ceding the southernmost part of the Mediterranean coast to total Palestinian control, and worse, uprooting the eight thousand Israeli settlers living there, was absolute anathema. But once Sharon came out with the plan, he wouldn’t be budged. What’s more, it was popular among the wider public and with the media.
In private, Netanyahu called disengagement “Sharon’s surrender plan.” Unilateral retreat was the opposite of all he believed in. But he was wary of jeopardizing his position as finance minister by openly opposing Sharon. For a year and a half, Netanyahu refused the entreaties of the settlers and right-wingers who begged him to lead the anti-disengagement camp. Instead he gave the plan his qualified and grudging public support, proposing conditions that Sharon usually ignored. On May 2, 2004, Likud held a party-wide referendum on disengagement, which Sharon lost 60–40. He continued anyway, making only cosmetic changes to the plan.
With a sinking heart, Netanyahu continued voting in both the cabinet and the Knesset in favor of disengagement, knowing that if it went through, his constituency would never forgive him. At the crucial Knesset vote in November, along with two other Likud ministers, he announced that he would refuse to vote if a nationwide referendum wasn’t called on the issue. Sharon, who had made clear that ministers not voting in favor of disengagement would be fired immediately, refused to speak to him, remaining seated in the plenum for hours as Netanyahu held anxious talks with his coconspirators in the corridors. It was a name vote, and when Netanyahu’s name was called out, he was still outside. The Knesset clerk read out the names of the absent MKs again, and at the last second, Bibi rushed in to vote yes amid jeering from all sides of the house.
In a collection of essays published before disengagement, he made his views clear. He believed that “putting a fence on an agreed border between us and the Palestinians won’t end the conflict and release us from its threat, until the Palestinians release themselves from their intention to destroy the Jewish state…. In unilateral retreat without anything in return there is existential danger.”16 But he was still not prepared to resign. Ten days before disengagement, he responded angrily to a journalist, saying, “You want me to resign? I’m the real Likud.”
Two days later, on August 7, he resigned.
Later Netanyahu would claim to have “always opposed disengagement,” but said he had stayed on until the last moment to make sure his financial reforms were securely in place and that he was leaving the economy in good shape. Sharon was scathing in his rebuke, saying, “After supporting disengagement four times, Bibi ran away.”17
Once again Netanyahu was cast out of the government, with his biggest rival firmly in power.