The resignation of Israel’s ultra-nationalist and belligerent Foreign Minister Avigdor Lieberman, indicted this week on charges of fraud and breach of trust, signals a significant shift in the politics of the country’s right. Mr. Lieberman is emblematic of the harshest aspects of Israeli domestic and foreign policy concerns, not least for his suggestion that Israeli Arabs be transferred out of the country by redrawing its border in exchange for the surrender of Israeli settlement blocs on the West Bank.

In 1998, Mr. Lieberman reportedly suggested Israel could bomb the Aswan high dam and flood Egypt. He has called for the expulsion of Israel’s Arab population, the “execution” of Arab MPs who met leaders of Hamas, and an oath of loyalty from Israeli citizens without which they would not receive the right to vote or social services.

The announcement of his resignation, a day after the decision to prosecute him by Israel’s Attorney-General, comes only a month before elections that the new coalition party formed by Mr. Lieberman and Prime Minister Benjamin Netanyahu had been expected to win easily. That outcome has been thrown into doubt. The foreign affairs role will reportedly be subsumed into Mr. Netanyahu’s office.

Israel’s Justice Ministry announced on Thursday that it would charge Mr. Lieberman over alleged irregularities tied to the promotion of an Israeli diplomat who had leaked to him privileged information about a police investigation into his activities.

Mr. Lieberman insisted he would remain. The prospect of being forced to stand down by a high court ruling appears to have changed his mind. He will still stand as an MP in January’s elections and retain his number two place on the joint Likud-Yisrael Beiteinu list, which would, if he is cleared, enable him to choose one of the top three offices — the Foreign Ministry, Treasury or Defence Ministry. More serious allegations, including money-laundering and bribery, were dropped.

Born in Moldova, Mr. Lieberman emigrated to Israel in 1978 where he quickly emerged as a controversial nationalist politician who embraced a dangerously populist rhetoric.

This week he accused the international community of being willing to “sacrifice” Israel, as Europe “sacrificed Czechoslovakia in 1938”. “Many key leaders would be willing to sacrifice Israel to appease the radical Islamist militants and ensure quiet for themselves,” he had said.

Mr. Lieberman worked briefly as a bouncer in a nightclub, joining Likud early on and becoming Mr. Netanyahu’s chief of staff when he was elected Prime Minister in 1996.

He was thrust to real prominence when he formed his own party, Yisrael Beiteinu, or Our Home is Israel, which has wide support among Russian emigrants.

Support for Likud-Yisrael Beiteinu had slipped even before the announcement of the decision to prosecute Mr. Lieberman. The question is what impact his resignation will have on that trend.

Especially problematic for Mr. Netanyahu’s coalition is the fact that Mr. Lieberman is regarded as Yisrael Beiteinu’s most visible and important electoral asset, suggesting it would be damaged if he is sidelined.

A poll for the media group that owns The Jerusalem Post suggests the party would win seven seats fewer than in the present government, not least because of a widespread perception that Israel’s international position has worsened in the past four years. The biggest beneficiary would be other rightwing parties.

Crucially for the Israeli Prime Minister, Mr. Lieberman was regarded as a reliable and close ally in the war party in the Israeli Cabinet over Iran and its nuclear programme. — © Guardian Newspapers Limited, 2012

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