Netanyahu becomes Israel military affairs minister

Israel set for early elections after cabinet breaks up, source says

Netanyahu's government teeters as coalition allies say it is 'not possible' to continue

Liberman's decision to pull his Yisrael Beitenu party out of the coalition almost toppled the Netanyahu coalition, and may yet do so; Bayit Yehudi party chairman Naftali Bennett has long coveted the defense portfolio but few if any of the other coalition partners are willing to allow him to serve in the position, due to his uncompromising - some call them "extremist" - positions on security.

Negotiations between Prime Minister Benjamin Netanyahu and Education Minister Naftali Bennett over the latter's demand to take over the defense ministry portfolio broke down on Friday, effectively bringing Israel closer to early elections.

Bennett, Netanyahu's other main right-wing rival and head of the religious nationalist Jewish Home party, has threatened to quit unless he is given Lieberman's job.

He later backed off and said he was committed to "responsible, reasonable policy".

With a major domestic political battle on his hands, Netanyahu cancelled a planned two-day visit to Austria next week for a conference on anti-semitism and anti-Zionism.

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"It is unacceptable that after 500 rockets are fired at southern Israel [earlier this week], the Israeli government is providing immunity to Hamas leaders", Lieberman said in reference to this week's truce.

Gaza's Hamas rulers are sticking to a cease-fire with Israel by keeping border protests widely restrained.

No tire burnings or attempts to breach the fence were reported.

Thousands of Palestinians participated in a Hamas-led rally along the perimeter fence dividing Gaza from Israel, with most crowds staying 300 meters from the fence. Since the near-weekly protests began in March, more than 170 Palestinians have been killed.

Israel's government has been plunged into a crisis since Lieberman's resignation that could potentially force the country into an early election. Protesters were also seen confronting Israeli police, who attempted to maintain order during the mass protest.

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