Israel is heading into one of the most significant elections in decades, and Prime Minister Benjamin Netanyahu is facing a political crisis that is far from a conflict between the right and the left. The Oct. 27 parliamentary elections are becoming a referendum on national security, the wars in Gaza and Iran, institutional responsibility and the costs of protracted conflict.

In this latest round of political events, there is an emerging split in the electorate. Former army chief Gadi Eisenkot has challenged Netanyahu's credibility; opposition leader Yair Golan stated that the prime minister might challenge a poor election outcome; and right wing politician Ofer Winter accused Netanyahu of harming the political parties in his own ideological camp.

Netanyahu's first hurdle is parliamentary arithmetic. The Knesset, Israel's parliament, has 120 seats, of which a 61-member coalition is needed to form a government. New polling data, as reported by Israeli media, indicates that neither of the two presumed alliances (Netanyahu's or the main opposition bloc) has a clear run at reaching that level. Eisenkot's Yashar party is a serious contender, and in certain polls is just ahead of Likud.

The numbers are important because the elections in Israel are never determined by the preferences of the single leader. They are determined through a process of coalition formation, smaller political parties and the negotiation of political opponents. The party that does not secure 3.25% of the seats in parliament can influence the seat distribution and even the election of the PM.

It is this weakness that Winter's criticism reveals. His People of Israel party has been unable to get over the hurdle, and Likud's efforts to outflank smaller right-wing parties may split votes that could go to a Netanyahu-led government. Winter's call for a wider right-wing alliance comes as a sign of a new level of frustration among conservatives, who have grown tired of political divisions that are undermining Israel in an extremely perilous security season.

Meanwhile, those opposed are trying to make accountability the theme of the elections. Eisenkot challenged claims that PM's Office records were manipulated after the October 7, 2023 Hamas attacks. These are only accusations and not findings of wrongdoing by Netanyahu.

The political meaning, however, is still significant. October 7 revealed intelligence and military and administrative deficiencies, which remain to shape the Israeli public opinion. Questions remain unanswered concerning government preparedness, operational decision making and institutional responsibility, and families of the victims are asking for answers.

Israel's struggle with Iran is a new wrinkle. Eisenkot has claimed that the goals of the Iran war have not been met and wondered whether Netanyahu should be trusted to make additional military decisions. His remarks come on the heels of renewed hostilities speculation prior to the election.

The Israeli military isn't yet planning for the results of an electoral calculation. But with an election looming, there is an unavoidable political dilemma: will another regional escalation reshape the campaign, redirecting voters' focus away from local accountability and towards national survival?

For the security establishment in Israel, it's a much more dire scenario than winning elections. Iran's missile power, armed networks in the region and its ability to strike back are threats which cannot be countered through slogans. The resumption of major operations would involve such factors as military effectiveness, American backing, civilian protection and the potential for a broader regional conflict.

Washington's interest is equally sizable. The Trump administration faces the challenge of handling the Iran situation, Israel's security concerns, Gulf security and the impact on the energy economy. It's possible that a change in government in Jerusalem will have an impact on diplomatic strategy, though not on Israel's basic security doctrine.

The economic statistics actually give a strange twist to the numbers. In 2025, Israel's economy grew by 2.9% and in Q1 of 2026 it was reported to have grown by 3.2%. The Bank of Israel has projected growth of 4% for 2026 and 5.5% in 2027. Unemployment is running around 2.8% and inflation has been around 1.5%. In 2025, foreign direct investment (FDI) is estimated at $26.2 billion, with significant contributions from technology and cybersecurity.

However, these statistics do not reveal the extent of the financial pressures. In March, Israel voted to fund a 699 billion shekel state budget, while the central bank estimated the total cost of the wars, excluding the ongoing campaign against Iran, at some 350 billion shekels. The amount of money put into the defence budget could increase to match 183 billion shekels a year, which is about 9% of GDP.

These pledges put a strain on any new administration. More spending by the military puts a strain on public spending, taxes, infrastructure and social services. While Israel's impressive technology industry is capable of absorbing rising security expenses, it cannot continue to do so without repercussions for productivity and living standards.

Household economics may be a specific aspect of importance. Although headline inflation was relatively low, it is reported that food prices actually rose by about 8% from early 2024 to mid-2026. According to surveys in Israel, the economy and the cost of living are among the top concerns for Jewish Israelis and Palestinian citizens of Israel—38% list them as such and 46% respectively.

The situation in the region is also bad. On October 12, the price of Brent crude was hovering around $104 per barrel, as Middle East tensions continued to flair. The Houthis' attacks on Saudi infrastructure have raised concerns about aviation security, energy exports and commercial insurance, especially after the deadly strikes on Riyadh airport. A long battle could lead to higher freight prices, higher investment costs, and inflationary pressures could be cascaded to big energy importers like India.

The impact on New Delhi goes beyond just the oil price. India's ties with Israel are important in terms of defence and technology collaboration, as well as building significant economic cooperation with Saudi Arabia and the United Arab Emirates. Regional stability, therefore, is more useful to India than any extended conflict between two competing powers in the Middle-East.

Palestinian issue also is not settled. If the coalition in Israel changes, they could alter some aspects of the diplomatic process, the mode of reconstruction or ties with Washington, but it is hard to imagine that it would lead to a significant shift in policy toward Gaza and the West Bank. Israel's politics are fraught with security worries and national rivalries.

Netanyahu's test isn't just about whether Israelis think he's a good leader. It's whether they think that his security policies have been successful in achieving outcomes that are commensurate to the massive military, diplomatic and economic spending.