Reports that the Israeli Prime Minister Benjamin Netanyahu is considering firing Defense Minister Yoav Galant shook the political landscape and sent Israeli financial markets lower on Monday, Reuters reported, as quoted by News.bg.
Leading Israeli TV channels and news websites have reported that Netanyahu, under pressure from far-right coalition partners, is considering firing Gallant and replacing him with a former ally-turned-rival – Gideon Saar, who is currently a member of the opposition.
Such a move would be a major shock to the political and security landscape, especially with the looming threat of all-out war between Israel and Iran-backed "Hezbollah" in Lebanon.
The shekel weakened 1% to nearly 3.75 against the dollar, while the main Tel Aviv stock indexes fell 1.4% to 1.6%.
The Israeli currency was expected to appreciate after data on Sunday showed that Israel's inflation rate rose more than expected – to 3.6% in August. According to analysts, this jump will delay rate cuts significantly in 2025, in contrast to expected rate cuts in the United States and Europe.
Netanyahu denied holding talks with Saar, but did not mention his plans for Gallant. Saar also denied negotiating with some members of the coalition.
This is not the first time Netanyahu has tried to fire Gallant. The two are at odds over a number of government policies, including the conduct of the war in Gaza and the terms of a possible hostage release and a cease-fire agreement with the Islamist group Hamas.
Centrist lawmakers criticized Netanyahu for turning away from political disputes instead of focusing on current crises.
"Instead of the Prime Minister being busy with the victory over "Hamas", the return of the hostages, the war against "Hezbollah" and allowing evacuees in the north to return to their homes, he is busy with despicable political deals and changing the defense minister," centrist lawmaker Benny Gantz wrote on social media.
Police Minister Itamar Ben Gvir, who heads an ultra-nationalist party in Netanyahu's coalition, has for months pushed for Gallant's replacement and called for his immediate dismissal.
"We need to resolve the situation in the north and Gallant is not the right person to lead this," said Ben Gvir, referring to a possible escalation with "Hezbollah".
Tens of thousands of Israelis were displaced near the Lebanese border in the north due to daily rocket fire from "Hezbollah".
Gallant, who rose to the rank of general during a 35-year military career, told US Defense Secretary Lloyd Austin on Sunday that he was committed to returning residents to their homes and that "the possibility of negotiations running out".
On Monday, he said the only way for evacuees from the north to return to their homes was through military action.
In March 2023, Netanyahu fired Galant after he defied the government and insisted on halting a highly contested plan to overhaul the judiciary. This sparked mass protests and Netanyahu backed down.