Netanyahu, 71, the most dominant Israeli politician of his generation, had failed to form a government after a March 23 election, the fourth in two years.

The new cabinet, which will be sworn in after a Knesset confidence vote it is expected to win, was cobbled together by the centrist opposition leader Yair Lapid and ultra-nationalist Naftali Bennett.

Bennett, a hawkish hi-tech millionaire and an Orthodox Jew, tweeted a photograph of himself at prayer, captioned with a Biblical blessing. He will serve as premier for two years before Lapid, a former TV host, takes over.

They will head a government comprising parties from across the political spectrum, including for the first time one that represents Israel’s 21% Arab minority. They plan largely to avoid sweeping moves on hot-button international issues such as policy toward the Palestinians, and to focus on domestic reforms.

With little to no prospect of progress toward resolving the decades-long conflict with Israel, many Palestinians will be unmoved by the change of administration, saying Bennett will likely pursue the same right-wing agenda as Netanyahu.

That looked likely regarding Israel's top security concern, Iran. A Bennett spokesman said he would vow "vigorous opposition" to any U.S. return to the 2015 Iranian nuclear deal but would seek cooperation with the administration of U.S. President Joe Biden.

BYE BYE BIBI?

On the international stage, with his polished English and booming baritone voice, the telegenic Netanyahu has become the face of Israel. Serving in his first term as prime minister in the 1990s and since 2009 winning four more terms in succession, he has been a polarising figure, both abroad and at home.

Often referred to by his nickname Bibi, Netanyahu is loved by his supporters and loathed by critics. His ongoing corruption trial - on charges he denies - has only deepened the chasm.

His opponents have long reviled what they see as Netanyahu's divisive rhetoric, underhanded political tactics and subjection of state interests to his own political survival. Some have dubbed him "Crime Minister" and have accused him of mishandling the coronavirus crisis and its economic fallout.

Celebrations by his opponents to mark the end of the Netanyahu era began late on Saturday outside his official residence in Jerusalem, the site of weekly protests for the past year, where a black banner stretched across a wall read: "Bye Bye, Bibi, Bye bye". Demonstrators sang, beat drums and danced.

But for Netanyahu's large and loyal voter base, the departure of "King Bibi", as some call him, may be difficult to accept. His supporters are angered by what they see as Israel turning its back on a leader dedicated to its security and a bulwark against international pressure for any steps that could lead to a Palestinian state, even as he clinched diplomatic deals with the United Arab Emirates, Bahrain, Morocco and Sudan.

None of those moves, however, nor the role he played in securing COVID-19 vaccines for Israel's world-beating inoculation campaign, were enough to grant Netanyahu's Likud party enough votes to secure him a sixth term in office.

Bennett has drawn anger from within the right-wing camp for breaking a campaign pledge by joining forces with Lapid. He has countered that another election - a likely outcome if no government were formed - would have been a disaster for Israel.

"This is a sad morning, because of the theft of votes and the fact Israel is getting a government based on one thing - a lie," Ofir Akunis, an outgoing minister from Netanyahu's Likud party, told Army Radio.

Both Bennett and Lapid have said they want to bridge political divides and unite Israelis under a government that will work hard for all its citizens.

Their cabinet faces huge foreign, security and financial challenges: Iran, a fragile ceasefire with Palestinian militants in Gaza, a war crimes probe by the International Criminal Court, and economic recovery following the pandemic.

Their patchwork coalition of parties commands only a razor-thin majority in parliament, 61 of the Knesset’s 120 seats, and will still have to contend with Netanyahu - who is sure to be a combative head of the opposition. And no one is ruling out a Netanyahu comeback.