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Despite fears of violent clashes between Israeli settlers and the Israeli security forces evicting them, disengagement from Gaza was over with few casualties in eight days in August 2005. Most Israelis were relieved. For Likudniks, however, it was the deepest crisis in the history of the Revisionist movement. A Likud government had voluntarily, without international pressure and without receiving anything in return, relinquished part of the Land of Israel and uprooted Jewish communities. For twenty-eight years, since Menachem Begin first came to power in 1977, the movement had struggled to bridge the growing chasm between ideology and pragmatism. Ariel Sharon’s disengagement from Gaza was a bridge too far.
Likud was irrevocably split between Sharon’s supporters, who justified disengagement, and those determined to punish Sharon and ensure Likud never again repeated such a travesty. Netanyahu sought to lead the latter camp, though many of its members found it hard to forgive him for voting in favor of disengagement and resigning only a week before the eviction.
At a stormy Likud Central Committee meeting in September, the microphones were mysteriously disconnected just before the prime minister’s speech, and Sharon barely managed to fight off a challenge from Netanyahu to hold an early leadership primary. Senior party members tried to broker a compromise whereby Netanyahu would be ensured the number-two and senior ministerial position in return for not running against Sharon. It was pointless. The two men were never going to cooperate again.
On November 22, Sharon left Likud and announced that he was dissolving the Knesset. It was a seismic shift in Israeli politics—the “big bang” that would blow away the Likud-Labor dichotomy in favor of a new centrist entity, or so at least many believed. Fifteen Likud ministers and MKs joined Sharon’s new party, Kadima (Forward). They included the likes of Ehud Olmert and Tzipi Livni, who had literally been born into the Revisionist movement and made ideological journeys to the center-left, and old Netanyahu allies, such as Tzachi Hanegbi, who believed in Sharon. Senior Labor members joined as well, including, most astonishingly, the eighty-two-year-old Shimon Peres.
Kadima was to be the new pragmatic establishment—a Mapai for the twenty-first century. Likud, reduced to its ideological rump, was once again the redoubt for extreme and detached holdouts.
Netanyahu expected those remaining to acclaim him as leader. But the remaining Likudniks were split between those who accused Bibi of pushing Sharon out and those blaming him for not moving against Sharon earlier. Many believed he wasn’t the man to rebuild the party. Five candidates challenged him in the leadership primary. Defense Minister Shaul Mofaz dropped out of the race to join Kadima, and Uzi Landau, once again running to Bibi’s right, agreed to stand aside. Even then, Netanyahu failed to achieve a convincing win. On December 19, he was elected Likud leader, six and a half years after resigning the post, with just 44 percent of the vote.
The demoralized Likudniks knew they were facing a wipeout. Sharon was reaching epic heights of popularity, having extricated Israel from the accursed Gaza and looking tough while doing so. At seventy-eight, he was the man who had isolated Arafat in Ramallah until Arafat’s mysterious death in November 2004, and then forced the Palestinians to end the Intifada. And he wasn’t afraid of taking on the settlers either.
It wasn’t just the Sharon surge. Other waves were crashing over Likud. Its traditional working-class voters, suffering from the results of Netanyahu’s cuts to social benefits, were deserting. Desperate to fill Likud’s war chest, Netanyahu tried to set up meetings with potential donors in the local business community. A few months earlier, they had been eager to meet their darling finance minister; now they weren’t even returning his calls. The stink of impending defeat stuck to Likud. Not since Rabin’s assassination had Netanyahu felt so isolated.
HAD SHARON RUN in 2006, Likud and Netanyahu’s career may indeed have been wiped out. But on the evening of January 4, it was Sharon’s bloated and much-abused body that gave out first. As the doctors confirmed that Sharon might never rise from the coma caused by his second stroke and massive brain hemorrhage, the prime minister’s military secretary took the designated acting prime minister, Ehud Olmert, to a secure room and handed him the files containing the secret protocols regarding Israel’s strategic assets.
Olmert was an accidental prime minister. Sharon had never seen him as a potential successor, awarding him the “designated acting” title only as compensation for giving the Finance Ministry to Netanyahu. A veteran politician, in the Knesset since his twenties, Olmert had nursed a deep personal rivalry with Netanyahu from the moment the former ambassador returned home. As Jerusalem’s mayor, Olmert had actively sabotaged the Likud’s 1999 campaign by hosting Barak in city hall and saying, on camera, that the Labor leader could be trusted on Jerusalem.
Olmert, born into a staunchly Jabotinskean family, had made a rapid transition from the far-right mayor who pressured Netanyahu to open up the Western Wall tunnel and build in East Jerusalem to Sharon’s outlier on disengagement. A brilliant, ruthless, and famously corrupt operator, he was deeply unpopular in Likud, where in the 2003 primaries he had only reached the thirty-second spot on the Knesset list.
Had there been time to hold a leadership primary, Kadima would probably not have fielded Olmert as its candidate. But the new party’s strategists had little choice but to go with the acting prime minister, relying on the sleeping Sharon’s aura to guide them to victory.
Nothing by then could save Likud. Not the last-minute change of Kadima’s leader or the surprise victory of Hamas in the second elections for the Palestinian Legislative Council, seemingly confirming Netanyahu’s prediction that Gaza would become a Hamas stronghold and terrorist base.
On March 28, Kadima won twenty-nine seats. It was nowhere near the unprecedented numbers that polls had been promising the party under Sharon, but enough to form a government. For the first time, a party that was not Likud or Labor had won the election. Olmert was now prime minister in his own right and already talking of a second pullback from settlements deep in the West Bank. This pullback was dubbed the “Convergence Plan,” and later sometimes the “realignment plan.”
But the real story of the election was Likud’s collapse. At twelve seats, it was the party’s worst result since 1951. It had dropped to fourth place, after Kadima, Labor, and Shas, only narrowly leading Avigdor Lieberman’s Yisrael Beiteinu by 116 votes. It was inconceivable that Netanyahu would remain leader after such a downfall. It was his third defeat in a row. He had lost to Barak in 1999 and to Sharon in the 2002 primaries, and now Olmert, with a lot of help from the comatose Sharon, had beat him. The knives were being sharpened the moment the exit polls were out at 10:00 p.m. Half the members of the drastically shrunken Knesset faction were already planning leadership challenges.
Netanyahu needed to take immediate action. Having watched the exit polls at a friend’s apartment in Tel Aviv, he rushed to the small hall where Likud was holding its election night event. The plotters were not there, just a few young MKs and a crowd of perhaps fifty disconsolate supporters and bored journalists. The journalists were exasperated at not having been sent to cover the wild scenes of drunken jubilation at Kadima headquarters.
As Netanyahu entered the hall, he steeled himself for booing. But there was silence. Many there expected another resignation speech. He took to the stage and launched into the speech he had been preparing on the way over. “I received the party in its most difficult days…. We will rebuild the movement and continue on our path, sticking to it. We’ve seen better days and we will see better days again…. Our way is the right and only way to bring security to the state.”1 The few dozen supporters began cheering his fighting words, and the young MKs, who minutes ago had been busy calculating whom to support in the leadership challenge, joined him on the stage. Alongside them was one member of the older generation—the jovial Jerusalem lawyer Ruvi Rivlin, once a stalwart of the David Levy camp and never a close ally of Bibi’s. That night, in the interests of the party, he lent his gravitas to the embattled leader.
On television, it looked like a valiant display of Likud unity. The would-be challengers sheathed their knives for the time being. It was a concession speech that secured Netanyahu’s political future.
LIKUD IN 2006 was a very different creature from the party Netanyahu had arrived to rebuild in 1993. Israeli party politics were no longer about maintaining a large grassroots organization with branches across the country. Campaigns were moving from the streets to the Internet. Messaging was much more important than organizing. Netanyahu was no longer a young star, but even in his late fifties, he was peculiarly adept at this new age of politics.
At MIT, Netanyahu had written papers on the effects of computer systems on business organizations. In his private life he is a technophobe. Bibi has very rarely ever operated his own computer or mobile phone. He always relied on aides to do that for him. As finance minister, he was surrounded by a team drawn from the finest in Israel’s civil service. With his resignation they dispersed. Back in opposition and embarking on yet another stage in his long slog back to power, Netanyahu went about rebuilding the support groups that had served him well back in the days he fought Rabin and Oslo. They were a combination of old loyalists, who stuck by him despite everything, and newcomers.
He fell back on “Bibi’s submarine,” the mix of right-wing academics and journalists who were still determined, like him, to replace the old elites. One notable addition to his unofficial team was Ron Dermer, the son of a former Democratic mayor of Miami Beach, who had emigrated to Israel in 1996. Dermer had worked for Netanyahu’s ally Natan Sharansky, helping him write the best-selling The Case for Democracy, a book that George W. Bush said had deeply influenced his thinking. Netanyahu had appointed Dermer as the economic envoy in the Israeli embassy in Washington, and the two had remained very close, often talking daily when in different countries. Dermer was to become one of the closest of Netanyahu’s advisers outside of his family and is regarded by other aides as “Bibi’s brain.”
Dermer also conformed to Netanyahu’s preferred profile for his aides—he was loyal, right-wing, religious, and American-born. So many of Netanyahu’s advisers are native English speakers that he often holds staff meetings in his office in Jerusalem in English, which makes him feel like he’s back at the Boston Consulting Group, a much more professional environment, to his taste. Another young aide in this mold was Ari Harow, who had emigrated to Israel from California, lived on a West Bank settlement, and returned to study in New York after his military service was complete. While there, Harow ran the American Friends of Likud, a fundraising operation, and when he returned to Israel in 2007, became Netanyahu’s adviser. One of the main roles of Netanyahu’s American-born advisers was to maintain his long list of foreign donors and when necessary connect them speedily to the boss.
Naftali Bennett was another of this crop of new aides. Born in Haifa to American parents, like Netanyahu he had spent parts of his childhood in North America and at the age of eighteen joined Sayeret Matkal. After serving as a special forces officer and studying business management at Hebrew University, Bennett had moved to New York, where he founded a start-up software company with Israeli partners. He became a millionaire when the company was sold in 2005 to RSA Security. As a teenager, Bennett hero-worshiped the mythologized Yoni Netanyahu and saw himself as following in his footsteps. In late 2006, he began to work for Netanyahu following the crisis that fatally weakened the Olmert government.
OLMERT, A VETERAN politician who had rarely dealt with high-level security affairs, appointed Labor’s leader, Amir Peretz, a trade unionist with even less relevant experience, as defense minister. They inherited as IDF chief of staff Lieutenant General Dan Halutz, a combat pilot. With its focus on war on the borders, the IDF had always been led by army generals who had commanded armored divisions and territorial headquarters, never by a man whose experience of the battlefield was from thousands of feet above. But Halutz had been one of Sharon’s favorites, a potential successor, and when appointing him, Sharon reckoned that as long as he was in power, there would be no lack of military experience.
The government and the IDF were woefully unprepared when a Hezbollah attack on an IDF patrol at the Lebanon border, on July 12, 2006, led to rapid escalation. The Iranian-backed militia had intended to capture Israeli soldiers, but ended up killing five and snatching two of the bodies back over the border. They hadn’t intended to start a war. In retaliation, Israel launched a massive air campaign against Hezbollah’s strongholds, wiping out many of the organization’s missile sites—but not all, by any account. Hezbollah responded with its own mortar and rocket barrages on Israeli towns and villages in the Galilee. A week into what had become Israel’s Second Lebanon War, ground troops were sent in.
Six IDF divisions, the entire air force, and most of the navy were involved in the fighting, which lasted thirty-four days. In the end, 121 Israeli soldiers and 44 civilians were killed, and while Hezbollah and Lebanese casualties were much higher, the war ended in what most Israelis felt was a humiliating stalemate. Despite being the overwhelmingly superior side, Israel had not stopped Hezbollah from firing on its towns throughout the war and had failed to take out Hezbollah’s top commanders.
A more experienced political leadership may have known when to hold back and not commit Israel’s military to an unnecessary all-out war. A chief of staff fully aware of the condition of his ground forces would have known that the IDF—tired after years of Intifada skirmishes in Gaza and the West Bank, its units, particularly the reserves, depleted and lacking in training from years of cutbacks under Finance Minister Netanyahu—was ill-prepared in the summer of 2006 to enter a war against a small but resourceful enemy. Six months after taking power, Olmert’s credibility was drastically eroded.
During the war, Netanyahu supported the government to the hilt. “Fight them, hit them, smash them. We’re with you,” he said, addressing Olmert in the Knesset.2 Once again, he toured the television studios, giving forceful interviews to the international networks, justifying the invasion of Lebanon. Israel’s two major supporters were President Bush and British prime minister Tony Blair. But Blair was taking a large amount of flak at home, from members of his own Labour Party and the British media, over his support for Israel’s “disproportionate response.” Olmert asked Netanyahu to fly to London, on another hasbara mission, to back Blair up. Netanyahu immediately agreed.
The government was prepared to pay for business-class tickets and five-star accommodation for Bibi and Sara. However, Sara demanded a higher-level first-class flight and a superior luxury hotel, as well as a personal assistant to fly with them. The solution was to get a Jewish British businessman, Joshua Rowe, who was prepared to pay thousands of pounds for the honor of sponsoring Netanyahu’s mission, to foot the bill for the upgrades. The Netanyahus stayed in a suite at The Connaught. Their penchant for luxury travel, sponsored by members of their millionaires club, was to come back and haunt them years later.
Netanyahu’s benefactors also helped fund the wages of a much larger staff than the Knesset and Likud were willing to fund. Another, more discreet contribution went to the organizers of the reservists’ protests after the war. As civilians who had been called up to fight in Lebanon returned, demanding that the politicians take responsibility for the failure of the war, Netanyahu kept a low profile. But he was coordinated with the organizers of the protests against Olmert. One of them, Naftali Bennett, who had rushed back from the United States to fight with his commando unit deep in Hezbollah territory, was recommended to him as a useful addition to the team. Bennett joined as Netanyahu’s new chief of staff, but would last less than two years before falling out with Sara.
THE DONORS WERE listed in four categories. The top tier combined both high net worth and high willingness to help out. Since Netanyahu had entered politics and holding primaries had become more popular with Israeli parties, the laws regulating political finance had been toughened up. Private donations were capped, corporations were forbidden to donate, and the candidates and parties had to give a full accounting of every shekel to the state comptroller. But there were other ways to use money.
Netanyahu’s main conclusion from his disastrous first term was something he constantly repeated in meetings with his benefactors: “I need my own media.” He had given up on Israeli journalists being honest enough to present him as the country’s only true leader. He was convinced that friendlier newspapers and TV channels would make all the difference. It wasn’t enough for those journalists to lean rightward. Bibi demanded loyalty from what he saw as his own “court reporters.” Even though it was under the ownership of friendly investors, he routinely tried to bully the editors of the Jerusalem Post. In 2004, he called the young editor, the American conservative columnist Bret Stephens, to complain of a passing reference in the paper to the “hot-tape” incident. “My children can now read English,” he thundered. Stephens, while supporting many of Netanyahu’s policies, refused to rein in his writers. Undeterred, Netanyahu continued to urge his rich friends to invest in the Israeli media.
Ron Lauder agreed to buy a majority share in Israel’s Channel 10, but changing the culture of an existing news organization was difficult, and there was a limit to how far Lauder was prepared to go in imposing his will on the channel’s editorial policy. A British Israeli businessman, Shlomo Ben-Tzvi, hoping to get close to Netanyahu, bought three small right-wing newspapers, but a lack of funds and chronic mismanagement stymied his plans to combine them into a new nationwide daily. But help was on the way from the top name on the list.
Sheldon Adelson had made his millions in computer trade shows, and his billions in mega-casino and hotel complexes. Based in Las Vegas, Adelson had not been on Netanyahu’s radar during his time in New York. After meeting his second wife, Miri, an Israeli doctor, Adelson began developing an interest in his Jewish roots and Israel. He was introduced to Netanyahu in 1990, and Netanyahu had helped the couple receive the unprecedented permission to have their wedding reception in the Knesset.
Over the years Adelson had donated hundreds of millions of dollars to Republican candidates, mainly through super PACs. Israeli law forbids such loopholes, but Adelson was able to support Netanyahu in other important ways.
Adelson founded Yisrael Hayom (Israel Today) in July 2007. The free daily paper was not a throwaway, like those distributed around the world with minimal original editorial content but plenty of advertising. Instead, it had a large team of journalists, some of them among the best-paid in Israel, and carried few ads. With Adelson paying for a circulation of over a quarter of a million copies across Israel, industry insiders estimated that he was losing over a hundred million shekels annually on the project (an amount equivalent to about $25 million). Adelson didn’t mind—he created a media outlet that could, and would, slavishly support Netanyahu.
Two loyal crewmembers of “Bibi’s submarine” were drafted in. Amos Regev, a veteran journalist, was appointed editor-in-chief, and Nathan Eshel, an old National Religious Party activist, and a particular favorite of Sara’s, became CEO. Yisrael Hayom’s editorial line was resolutely on the right, glowing in its coverage of Netanyahu and his family and intensely critical of Olmert. Not that a hostile tabloid was the worst of Olmert’s troubles.
ALLEGATIONS OF CORRUPTION had dogged Olmert for much of his career. After becoming prime minister, they went into overdrive. In little more than eighteen months, five separate police investigations were launched into his financial affairs. Olmert insisted he had done nothing wrong, but evidence of bribery and fraud accumulated. On May 27, 2008, the Jewish American businessman Morris Talansky testified in a pretrial hearing at the Jerusalem District Court, describing in detail how he had regularly passed envelopes stuffed with cash on to Olmert.3
By Israeli law, a minister can remain in office until indicted, and a prime minister only has to resign following a conviction. Olmert insisted that Talansky was lying and that he had no plans to resign. However, following Talansky’s graphic testimony (which ultimately would not lead to a conviction), Ehud Barak, who had recently returned to politics, replacing Peretz as Labor leader, threatened to leave the coalition if Olmert stayed on. On July 30, Olmert announced that he would resign as soon as Kadima appointed his successor.
On September 17, Foreign Minister Tzipi Livni won the Kadima primary. The young anonymous woman who had been seen crying at Likud headquarters on the night of the 1996 election, when they thought Netanyahu had lost, was old Likud aristocracy. Her father, Eitan, had been the IZL’s operations commander and a Knesset member. After a brief career as a commercial lawyer, and an even shorter period as a Mossad operative, she had launched her own political career. Netanyahu in 1996 had counted Livni a loyalist and appointed her to the coveted position of director-general of the Government Companies Authority, which regulates state-owned companies. After Netanyahu’s departure, she had fallen under Sharon’s spell, and as her political views began shifting leftward, she relinquished her parents’ Greater Land of Israel dreams.
Livni should have had no problem keeping Olmert’s coalition together and becoming Israel’s second female prime minister. But Livni, who had spent the past two years fruitlessly negotiating with the Palestinians, was terrible at coalition horse-trading. To makes things more difficult, Netanyahu was quietly dealing with his old ultra-Orthodox allies in Shas and United Torah Judaism (Yahadut Ha’Torah). Livni failed to meet their demands for extra funding and religious legislation, and on October 26 she was forced to announce that she could not form a coalition. Early elections were set for February 24, 2009.
The plan to replace Likud with a new centrist party was in jeopardy, but the ex-Likudniks who had joined Sharon in Kadima were still convinced they had been right. At his last cabinet meeting before the election, Olmert said, “The dream of the Greater Land of Israel is over and doesn’t exist anymore and anyone who talks about it is deluding himself.”4 Netanyahu was determined to prove them wrong.