There is a long way to go before Labor joins the government. Incoming Labor and opposition leader Isaac Herzog has already made clear to Prime Minister Benjamin Netanyahu that he is prepared to meet, as soon as possible, to discuss national plans and needs, but nothing more than that. If Likud officials thought Herzog's election meant that Labor would quickly join the government, then they forgot to ask the bride. Herzog is certainly more open to joining the government than former Labor Chairwoman Shelly Yachimovich (who has wisely accepted Herzog's victory, but remains very powerful), yet there are two matters that take precedence. First, Herzog likely believes that, sitting on the opposition benches, he could expand his base of support within Labor. There are two groups within Labor from which he could attract support -- those who did not favor Yachimovich's overemphasis on social issues; and those who have doubts about Likud's intentions to reach a peace deal with the Palestinians, but would be willing to join the government if those doubts proved to be unfounded. Secondly, the diplomatic issue is key. Herzog is concerned that the negotiations with Palestinian Authority President Mahmoud Abbas will reach a dead end and he fears a European boycott of settlement goods and Israeli academic institutions. Herzog also probably wonders why he would ever join a coalition that has a foreign minister who talks about the need to find alternative allies to the U.S. U.S. Secretary of State John Kerry gets up every morning thinking about the Israeli-Palestinian negotiations, but will enough progress be made to justify Labor joining the government? If Herzog took such a step, he would be betting his entire political hand, especially since he already served in the previous government. He could not afford to do so again unless he could ensure a least a minimal result -- that if the negotiations fail, the West would hold Abbas responsible. Even with the hurdles, and despite the fact that associates of Herzog say that Labor is seeking to replace the government, not join it, Herzog's election has given the coalition the feeling that it now has an extra player sitting on its bench. If Science and Technology Minister Yaakov Peri's prediction comes true (that either Peri's Yesh Atid or Habayit Hayehudi will have to leave the government), then Labor would become an important player. Herzog could take Habayit Hayehudi leader Naftali Bennett's place. Such a moment of truth is not imminent, particularly since Likud and Yisrael Beytenu have yet to determine the future of their relationship. Moreover, the balance of power within Likud itself is still unsettled. Rightists in Likud claim to support a national referendum on any peace deal, but in reality they would prefer a new general election be held in such a scenario. It appears that Netanyahu faces just as many difficulties from within his own party regarding the peace process than he does from Habayit Hayehudi.
In terms of the political stock market, Herzog's election as Labor's new leader has given the government certain new options, but these options are far away from being exercised.
