However, Israeli law stipulates that if the 2020 state budget was not passed by 23 December 2020, the Knesset would be dissolved, and elections would be held by 23 March 2021.

[2] On 2 December 2020, the Knesset passed the preliminary reading of a bill to dissolve the current government by a vote of 61–54.

[6] The 120 seats in the Knesset were elected by closed list proportional representation in a single nationwide constituency.

[7] Two parties could sign a surplus vote agreement that allowed them to compete for leftover seats as if they were running together on the same list.

The Bader–Ofer method slightly favours larger lists, meaning that alliances are more likely to receive leftover seats than parties would be individually.

Knesset MK Sami Abu Shehadeh announced on 14 January 2021 that he would run for the leadership of Balad.

[24] The Tel Aviv District Court ruled on 3 January 2021 that primaries for Labor's Knesset list and leadership must take place, despite the fact that Amir Peretz and his supporters voted in favor of canceling them.

Avi Shaked and David Landsman,[29] Ethiopian immigrant Yitzhak Time,[30] and Na'ava Katz also ran.

The daily Haaretz endorsed four parties in the 2021 election: Meretz, the Joint List, Labor, and Yesh Atid.

[51] Israeli President Reuven Rivlin met with the heads of all political parties on 5 April,[55] and charged Benjamin Netanyahu with forming the government the next day.

[60][61] On 10 May, it was reported that plans were made to form a new government consisting of the current opposition, but that the Islamist Ra'am Party, which froze talks with both Lapid and Bennett in the wake of recent warfare in Gaza, still needed to pledge support for the Change bloc for the opposition MKs to secure a majority.

[66][67] Just an hour before his 2 June mandate was set to expire, Lapid informed outgoing president Reuven Rivlin that he could form a new government.