Israel’s October 27, 2026 election produced a fragmented Knesset, with Benjamin Netanyahu’s Likud-led bloc securing 53 seats and Gadi Eisenkot’s opposition bloc holding 48, leaving both short of the 61-seat majority required to form a government. Arab parties captured a record 19 seats and emerged as potential kingmakers, while official results and President Isaac Herzog’s assignment of coalition-forming responsibility are due by early November. Negotiations now center on whether either leader can secure cross-bloc support, including possible unity arrangements, or whether Arab parties participate despite prior pledges. Netanyahu remains caretaker prime minister during the process, which allows up to 42 days before another election could be triggered if no coalition succeeds. These dynamics and the tight seat distribution shape trader views on the next government’s composition.