# Israel's New Knesset Opens Without a Government as Washington Moves to Cut Military Aid

Gadi Eisenkot has not assembled a coalition to replace caretaker Prime Minister Benjamin Netanyahu, and Trump says $4 billion a year in American military aid will end by the close of 2026, two years before the current agreement expires.

- Published: 2026-11-11T05:05:05.566Z
- Canonical: https://polylog.news/2026-11-11/israel-s-new-knesset-opens-without-a-government-as-washingto
- Publisher: Polylog (Global desk)
- Section: geopolitics
- Sources: [Deutsche Welle](https://www.dw.com/en/israel-eisenkot-proposes-october-7-probe-as-new-knesset-sworn-in/a-79913636), [BBC News Hindi](https://www.bbc.com/hindi/articles/cm4gnql9xyk9o?at_medium=RSS&at_campaign=rss), [Al Jazeera](https://www.aljazeera.com/video/newsfeed/2026/11/11/aje-onl-nf_the-future-of-us-israeli-defence-partnership-101126), [Globes (Hebrew)](https://www.globes.co.il/news/article.aspx?did=1001562908#utm_source=RSS)

Israel's new parliament was sworn in on Tuesday, but no new government has been formed. Former military chief Gadi Eisenkot has not yet formed a coalition to replace Benjamin Netanyahu, even though critics of the caretaker prime minister dominate the Knesset, [Deutsche Welle reported](https://www.dw.com/en/israel-eisenkot-proposes-october-7-probe-as-new-knesset-sworn-in/a-79913636). Eisenkot used the opening to propose an inquiry into the October 7 attacks. [BBC News Hindi](https://www.bbc.com/hindi/articles/cm4gnql9xyk9o?at_medium=RSS&at_campaign=rss), surveying Israeli press coverage, reported that commentators do not expect a government to be formed soon. Former Prime Minister Naftali Bennett repeatedly heckled Netanyahu during the session, [Al Jazeera showed](https://www.aljazeera.com/video/newsfeed/2026/11/11/netanyahu-heckled-by-bennett-at-knesset-opening-session).

Whoever forms the next government will face a change in American support. On November 3, President Trump said annual military aid of about $4 billion would end by the close of 2026, [the Times of Israel reported](https://www.timesofisrael.com/trump-says-us-to-end-4-billion-in-annual-military-aid-to-israel-by-end-of-2026/). The current memorandum of understanding (MOU) runs through 2028. Congress appropriates the money, and Trump has acknowledged he cannot end it alone, [Al Jazeera reported](https://www.aljazeera.com/news/2026/11/3/trump-announces-that-us-will-stop-paying-israel-after-year-end). Trump said Washington would keep selling arms to Israel. [Al Jazeera](https://www.aljazeera.com/video/newsfeed/2026/11/11/aje-onl-nf_the-future-of-us-israeli-defence-partnership-101126) examined what the change means for the defense partnership. President Isaac Herzog has urged that the MOU stay in force, and Eisenkot criticized the fact that Israel's defense establishment learned of the decision from media reports.

Netanyahu's office is aligning itself with Washington on Gaza. After a call with Trump, it said in an English-language statement that Israel is "committed to the Trump plan," [Globes reported](https://www.globes.co.il/news/article.aspx?did=1001562908#utm_source=RSS). The statement described winter supplies entering Gaza, including tens of thousands of tents, clothing and vacuum trucks. It also said Hamas must disarm before reconstruction begins. Globes also noted that Iranian President Masoud Pezeshkian had travelled to Turkey for a United Nations conference.

## What this means

The mechanism is fiscal. If the aid ends, Israel will pay for weapons it now receives on credit, which raises its defense spending and borrowing requirements. That would put pressure on its sovereign spreads and the shekel, especially while no government exists to pass a budget. Trump gains domestic political cover and more leverage over Israeli decisions on Gaza and Iran, which the "committed to the Trump plan" statement already reflects. Congress controls the appropriation and can slow the change, but after January it will be led by a party in which support for the aid has weakened. Markets have not priced a longer period without a government combined with a self-funded defense budget. The likelier outcome is that Congress funds existing programs such as missile defense through 2027 while new grants shrink, which shifts weapons costs onto Israel's budget within a year. A Knesset coalition formed quickly with a credible budget would reduce the risk premium. A new MOU negotiation started by Washington would show the cut was a bargaining position.

## What to watch

- Whether Congress includes Israel's usual military financing in its year-end spending bills. That vote will decide whether Trump's statement becomes policy.
- Whether Eisenkot or Netanyahu can show a majority before the deadline to form a government. A further election would delay Israel's next budget.
- Israel's sovereign bond spreads and the shekel. Wider spreads would show investors pricing a larger self-funded defense bill.