The previous separate election for Prime Minister was scrapped, and the post was returned to the leader of the party successfully forming the working coalition government.

This situation significantly affected the potential voters of the Labor Party, which since 1977 relied primarily on the moderate left.

After making serious allegations of racial discrimination against him due to being Sephardi, Ben Eliezer was forced to agree to another round of primaries.

A temporary lull in terrorist attacks against Israelis was among the reasons that the Shas party ministers opposed the emergency economic plan and voted against it in the Knesset.

On 23 July 2002, the Knesset approved the Tal Law as an attempt to reach a compromise to the public demand that the Israeli ultra-Orthodox citizens would share an equal extent of obligations which other Israeli citizens are required to fulfill, specifically requiring them to serve in the Israel Defense Forces.

The adoption of the law, which in practice legitimized the existing massive draft dodging within the ultra-Orthodox community (while giving them the option to work for a whole year after they get to the age of 18, and afterwards giving them the option to choose whether to join the military or civilian service, or return to the yeshiva), caused a significant strengthening of contempt among the Israeli public towards the ultra-Orthodox community, as most non-Muslim non-ultra-Orthodox Israelis are obligated to serve in the military for several years when they reach age 18.

These facts, coupled with the lack of clarity regarding the extent of Cyril Kern's businesses in Israel, became "political dynamite", and were investigated during the election campaign by the State Attorney's Office.

The exposure of the affair caused a political storm and led to calls for the resignation of Ariel Sharon from the opposition.

On the other hand, Likud members alleged that the leak of the affair's details was politically motivated and intended to harm Sharon's popularity.

[2][3] Despite gains by the right in the election, multiple polls showed strong public support for policies advocated by the left (such as dismantling settlements, unilaterally withdrawing from Gaza, and creating a Palestinian state).

His coalition initially included just Shinui and the National Union, although Yisrael BaAliyah had merged into Likud soon after the election.

The party later disintegrated following a disputed leadership election, with eleven MKs leaving to form the Secular Faction and one left to establish HaOlim, which merged into the National Union.

Labor–Meimad later pulled out in November that year, the same month in which Sharon led a breakaway of fourteen MKs from Likud to form Kadima.