The announcement, which includes a timeline for potential annexation of parts of the West Bank over the summer, appears to bring to an end more than a year of political deadlock during which Israel held three general elections.
Gantz had campaigned in all three national polls promising that he would not be part of government with an indicted Prime Minister but broke with his Blue and White allies almost a month ago when he announced he was seeking a unity government with Netanyahu.
“We prevented a fourth election,” Gantz tweeted Monday evening after the announcement of an agreement, adding, “We will safeguard the democracy, we will fight the coronavirus and we will take care of all the citizens of Israel.”
Netanyahu echoed the message of unity in a tweet of his own.
“I promised the state of Israel a national emergency government that will act to save the lives and livelihoods of the citizens of Israel. I will continue to do everything for you, citizens of Israel,” he said.
The agreement sets a date of July 1 from which the process to annex parts of the West Bank, as envisioned in the Trump administration’s peace plan, can begin.
Under the Trump plan, Israel can expect to receive the United States’ support for the application of Israeli sovereignty over all settlements in the territory as well as the Jordan Valley, which lies along the border with Jordan.
The new government agreement does not spell out exactly which bits of territory are earmarked for annexation, but instead commits Netanyahu and Gantz to approach the issue “with the full understanding of the US … and with international dialogue in the matter.”
Responding to the announcement, Palestine Liberation Organization Secretary General Saeb Erakat said in a statement annexation would mean “the end of any possibility for a negotiated solution” between Israelis and Palestinians.
“The new Israeli government has two options: open the doors for a meaningful peace process or to further jeopardize any hope for peace,” Erakat said.
Under the terms of the new government agreement, Netanyahu will continue as Prime Minister for a further 18 months, after which he will step aside and Gantz will take over.
If Netanyahu resigns before the end of his year and a half, the agreement sees Gantz taking over as leader of a transitional government.
During the first part of the rotation arrangement, Gantz will be known as the Alternate Prime Minister, and his Blue and White party will hold the key position of Defense Minister, as well as Foreign Minister.
But it could still be several weeks before a new government is sworn-in. Even though Gantz has agreed to let Netanyahu remain as Prime Minister, Israel’s President Reuven Rivlin is required by law to give Netanyahu the mandate to form a new government.
At that point, it is possible there will be a fresh petition submitted to the High Court to declare Netanyahu’s mandate illegal because of his criminal indictments.
Netanyahu has been indicted on charges of bribery and breach of trust; he insists he is innocent, calling the charges an attempted coup.
If the High Court were to find in favor of the petitioners then Israel could yet find itself facing a fourth general election in the summer.