Israel's Knesset dissolved in July 2026 after completing a full term, triggering elections on October 27 that have produced a fragmented outcome in recent polls, with neither the pro-Netanyahu bloc nor opposition parties led by Gadi Eisenkot securing a clear path to 61 seats. Post-election government formation requires the president to designate a prime minister candidate, coalition negotiations among multiple parties including ultra-Orthodox and potentially Arab factions, and a subsequent Knesset vote of confidence, all within roughly two months. This compressed timeline, combined with recurring coalition frictions over issues like Haredi conscription and the need for broad majorities in Israel's proportional representation system, has left traders evenly split on whether a new government can secure approval by December 31. A decisive election result favoring one bloc or rapid cross-party agreement could accelerate the process and raise the odds of passage, while prolonged negotiations or renewed internal disputes would likely push resolution past year-end.