Referenews

It also marks the first time that Mr. Netanyahu’s party will be the most moderate in his cabinet. His biggest challenge, political analysts say, will be keeping his hard-line government together without alienating the U.S. or Arab allies, some of which have only recently normalized relations with Israel. His government’s policies could also hamper one of his most ambitious foreign-policy goals: normalizing relations with Saudi Arabia. 

In a speech to the Knesset on Thursday morning, Mr. Netanyahu said his government would aim to counter Iran’s nuclear program, expand Israel’s ties with the Arab world and upgrade the country’s infrastructure. 

“I am proud that together we have led Israel’s golden age, and that is what we will do in the coming years for all Israeli citizens, without any exceptions,” Mr. Netanyahu said amid intermittent yelling from opposition lawmakers. 

Israel’s president, attorney general, chief of police and chief of staff of the army have all raised concerns over the policy goals of Mr. Netanyahu’s incoming government. Departing Prime Minister

Yair Lapid

told the Knesset on Thursday that he was “passing the baton with an unquiet heart.”

Mr. Netanyahu has dismissed concerns over Israel’s democratic institutions as fearmongering, telling the opposition on Thursday, “Losing an election is not the end of democracy, it is the essence of democracy.”

Historically, Mr. Netanyahu’s coalitions have included parties to his left, creating a balance within the coalition, say political analysts. But those parties say they are unwilling to sit with Mr. Netanyahu. They say he is focused on staying in power in an effort to extricate himself from his two-year-old corruption trial, in which he denies any wrongdoing.

Yohanan Plesner, president of the Jerusalem-based Israel Democracy Institute, a think tank, said Mr. Netanyahu’s partners know that they wield tremendous power over the prime minister since he has no other partners with which to form a government.

“He has no option of bringing in another party,” he said. “Each and every one of those factions that are members can topple the government.”

Mr. Netanyahu, whose stints in power since 1996 have made him Israel’s longest-serving prime minister, awarded key ministerial posts to once fringe far-right allies. Ultranationalist lawmaker

Itamar Ben-Gvir,

who was convicted of supporting a Jewish terrorist group and incitement to racism in 2007, was handed a newly minted national-security portfolio that will give him control of Israel’s police force.

The position will give Mr. Ben-Gvir authority over Israel’s Border Police, whose gray-uniformed officers often handle sensitive operations such as riot control and counterterrorism. The Border Police will become a stand-alone force whose head would answer directly to Mr. Ben-Gvir rather than Israel’s police chief, according to a published coalition agreement released on Wednesday.

The leader of the ultranationalist Religious Zionism Party,

Bezalel Smotrich,

will become finance minister and hold a key post that oversees Israeli settlement construction in the occupied West Bank. Two ultraorthodox parties and an anti-LGBT party will also join the coalition and hope to cement an orthodox interpretation of Judaism in many areas of public life.

The coalition agreed to pass a law that would enable businesses to refuse customers should serving them violate their religious beliefs, including members of the LGBT community. As an example, Religious Zionism lawmakers said hotel owners could refuse to host LGBT groups.

“This government was elected democratically, but they’re going to do some very undemocratic things,” said Keren Mor, a 35-year-old from Tel Aviv who joined demonstrators outside the Knesset on Thursday. “They’re going to try and trample everything we’ve achieved on human rights.”

Coalition agreements are nonbinding road maps of political goals that governments aim to achieve during their four-year terms. While the agreements represent the goals of the cabinet, any changes to laws must first be passed by the Knesset. Prime ministers haven’t always followed through on promises made in coalition agreements.

Mr. Netanyahu’s nationalist partners hope to one day annex the West Bank and reject the establishment of a Palestinian state, although imminent annexation isn’t part of the coalition agreements between Mr. Netanyahu and his partners. Mr. Smotrich has said he would work to make living in Israeli settlements similar to civilian life in Israel’s internationally recognized borders. The Religious Zionism party platform calls for the establishment of Israeli “de facto sovereignty,” since the U.S. opposes outright annexation.

On Wednesday, Mr. Netanyahu said his new government would be guided by the principle that “the Jewish people have an exclusive and indisputable right to the entire land of Israel.” The coalition would advance settlements in “all parts of the land of Israel,” including the West Bank, he said.

A spokesman for Palestinian Authority President

Mahmoud Abbas

said Wednesday that Mr. Netanyahu’s statements on settlements constituted a “big escalation” and called on the U.S. to take a harsher stance on Israel.

“The United States must turn its words into deeds, since it is committed to a two-state solution,” Mr. Abbas’s office said in a statement.

The Biden administration has warned Israel against annexation and opposes the expansion of Israeli settlements in the West Bank, as well as any other move that could harm the prospects for a Palestinian state. Mr. Netanyahu will need to keep the U.S. in his corner to pursue his top priorities of foiling Iran’s nuclear program and normalizing relations with Saudi Arabia.

Biden administration officials have said they will judge Mr. Netanyahu’s government by its actions, not its personalities. In a statement on Thursday night, President Biden said he looked forward to working with Mr. Netanyahu but noted that Washington would oppose policies that undermine a two-state solution or “contradict our mutual interests and values.”

Mr. Netanyahu will also have to contend with an increasingly volatile situation in the West Bank. Violence has left at least 146 Palestinians dead this year across the West Bank, according to the United Nations. Many of those killed belonged to militant groups that have carried out shooting attacks against Israeli soldiers and civilians, raising fears of a broader escalation. At least 31 Israelis have been killed in 2022 in attacks by Palestinians in Israel and the West Bank.

The coalition agreements also call for the new government to make sweeping changes to Israel’s judicial system. Mr. Netanyahu and his allies say reform is needed to restore the balance of power between elected officials and the Supreme Court, which they accuse of bias against right-wing legislation.

Mr. Netanyahu’s allies want a majority of lawmakers to be able to override Supreme Court rulings, and some want to give lawmakers more power to appoint judges. Critics say the changes would give lawmakers unchecked power and leave minorities defenseless.

Legal scholar

Alan Dershowitz,

a longtime supporter of Mr. Netanyahu, said he met recently with the new prime minister to urge him not to pass laws that would undermine the Supreme Court’s ability to safeguard human rights and minorities.

He said Israel’s top court was “respected all over the world, for its objectivity and its neutrality” and that such a move would be “a serious, serious mistake.”

Ultraorthodox parties in the government are hoping to dramatically expand government funding for their religious institutions. They also hope to enshrine in law a policy that exempts religious men from mandatory conscription if they study Jewish law in religious seminaries. The policy was deemed illegal by Israel’s highest court in 2017. They also hope to permit gender segregation at some public events, according to the published coalition deals.

The groups are also hoping to change who qualifies as Jewish under Israel’s right of return, which currently permits anyone with one Jewish grandparent to obtain citizenship. Ultraorthodox parties want to remove the so-called grandchild clause, moving the law closer in line with halacha, or Jewish law, which says someone is Jewish if they have a Jewish mother. The coalition agreements say the government will agree on what changes to make to Jewish immigration policy within 60 days of formation, but don’t provide details.

The proposed changes by ultraorthodox parties have drawn concern from American Jews, most of whom aren’t orthodox.

The New York-based Union for Reform Judaism, which represents the largest religious denomination of American Jews, called the proposed changes “a serious violation of the sacred bond the State of Israel has established with Jews around the world.”

Write to Dov Lieber at dov.lieber@wsj.com and Shayndi Raice at Shayndi.Raice@wsj.com