On 2 June 2021 a coalition agreement was signed between Yesh Atid, Blue and White, Yamina, the Labor Party, Yisrael Beiteinu, New Hope, Meretz, and the United Arab List.

Namely, under a rotation agreement, Naftali Bennett of Yamina initially served as Prime Minister[6] but ultimately ceded the position to Yair Lapid of Yesh Atid, after the coalition fell on June 30, 2022.

[41] In addition, while Netanyahu had been open to limited forms of cooperation with the United Arab List to put an end to the deadlock, the Religious Zionist Party ruled out being a part of any right-wing majority which would rely on the UAL's outside support.

Namely, in a bid to appease Bennett and Sa'ar – either of whom was foreseen to take part in a potential rotation, he offered the post to fellow Likud member and Knesset speaker Yariv Levin.

Namely, Lapid stated his willingness to enter into a rotation government with Naftali Bennett, and even offered him the opportunity to hold the post of prime minister for the first half of the Knesset term.

[46] These efforts to establish a broad anti-Netanyahu government, which would span the whole political spectrum, were challenged by questions relating to the distribution of ministerial portfolios between the three main blocs (right, centre, and left), as well as to the possibility of including a mutual veto into any coalition agreement among the parties.

[52] On the same day, one of Yamina's Knesset members, Amichai Chikli, voiced his open opposition to any agreement on a new government which would include Meretz or the Joint List, thus potentially lowering the bloc's plurality from 58 to 57 seats.

They included the adoption of laws regarding the following issues: a two-term limit for the prime minister, compulsory voting in elections, compulsory conscription for male ultra-Orthodox Jews, putting more focus on secular studies in the ultra-Orthodox Jewish community, a penalty of life imprisonment for the rape of a minor, allowing local authorities to decide on the closure of businesses on Saturdays, the introduction of civil law marriage,[54] as well as a new, two-year state budget.

[55] The party's chairman, Avigdor Lieberman, also promised to set up two state commissions of inquiry, to investigate the Netanyahu administration's possible culpability in the circumstances which led to a deadly stampede on Mount Meron on 30 April 2021, as well as its overall handling of the COVID-19 pandemic in the country.

[57] The parties of the potential coalition also discussed a rotation agreement regarding the position of Knesset speaker, which could have been held by Meir Cohen of Yesh Atid and Ze'ev Elkin of New Hope.

These included a policy of avoiding major discussions on matters of religion – unless it was shown that there could be potential broad support for a certain decision in that area; a decision to continue Netanyahu's policies regarding the West Bank – that is, to maintain existing Israeli settlements there, and allow further construction within them, but also to not allow any new settlements or to annex any new areas of the West Bank; and a possibility of setting up a state commission of inquiry to investigate the circumstances of the 30 April stampede at a Jewish pilgrimage site on Mount Meron.

Local sources thus reported that Lapid had intended to inform president Rivlin of his success in building a government by the end of the second week of May, with the swearing-in of Naftali Bennett as Israel's 13th prime minister then due to take place some time after the Shavuot festival[58] (which fell between 16 and 18 May 2021).

[59] On the afternoon of 10 May 2021, the clashes in Jerusalem between Palestinian protesters and Israeli police – which had been ongoing since 6 May,[60] escalated with the firing of over 400 rockets at Israel by both Hamas and the Islamic Jihad Movement in Palestine.

[63][64][65] As a result of these incidents, the talks on the formation of a new government were frozen indefinitely, with the United Arab List refusing to continue the then-nearly finalized negotiations with the "change bloc" and Yamina until the security situation is resolved.

[67] During the evening of 13 May and the morning of 14 May 2021, Yamina formally abandoned the coalition talks with the "change bloc", with Naftali Bennett stating that he no longer favoured establishing a government which would rely on the support of the United Arab List.

In his announcement, Bennett cited the ongoing conflict between Palestinian militant groups and the Israeli military, as well as the riots and looting taking place in Israel, as the reasons for his decision.

Namely, Bennett emphasized that he felt that a UAL-backed "change bloc" government would not have the capacity to deal with the security challenges facing the country, nor could it implement the necessary legal consequences which would need to befall those who took part in the unrest.

Bennett thus declared that he would once again initiate talks with Likud, and would aim to form a broad "unity government", which could possibly also include Yesh Atid, Blue and White, and New Hope.

Lapid refused to give up on forming a "change bloc" government, stating that he will keep the presidential mandate until it expires, and also expressed a willingness to face a new election if all other options fail to resolve the deadlock.

[79] On the afternoon of 1 June 2021, as talks between the various parties were reported to be coming to a conclusion, Mansour Abbas announced that the United Arab List intends to be a full-fledged member of the "change government" coalition.

Specifically, media sources reported that Prime Minister Netanyahu had agreed to repeal a controversial piece of legislation which addresses illegal housing construction – popularly dubbed the "Kaminitz law", and had thereby indirectly encouraged the UAL's MKs to heighten their demands in their talks with the "change bloc".

[85] On the night of 2 June, just hours before the expiration of Lapid's mandate to form a government, Yamina made a formal offer to Labour, with the aim of resolving the issue surrounding the membership of the Judicial Appointments Committee.

[citation needed] In response to this, Michaeli accepted the concept of a rotation, but insisted that she should serve during Bennett's tenure as prime minister, to ensure an ideological balance between the party blocs.

[94] The basic guidelines of the new government's policy would be the following: a bill to set term limits for the prime minister and allow only one re-election (though the details of the bill are not yet laid out), the setting up of a commission of inquiry to investigate the April 2021 Mount Meron disaster, the abolition of four existing government ministries – Cyber and National Digital Matters, National Infrastructures, Energy and Water Resources, Community Empowerment and Advancement, and Strategic Affairs; the increasing of the old-age income supplement to 70% of the minimum wage, the adoption of a reform package to benefit disabled war veterans, the creation of more competition among the providers of kashrut services and the introduction of consistent standards in that area, as well as the changing of the body which selects the chief rabbi (so as to allow for the election of a Zionist to the position), and the opening up of the possibility for gentiles to convert to Judaism by applying with municipal rabbinical authorities.

[95] The outgoing speaker of the Knesset, Yariv Levin, a member of prime minister Netanyahu's Likud party, had indicated that he would attempt to delay the holding of an investiture vote for the proposed Bennett-Lapid government for as long as legally possible.

[96] Thus, on 3 June 2021, some of the parties of the "change bloc" initiated a motion of no-confidence in Levin, with the aim of replacing him with Mickey Levy of Yesh Atid and bringing the investiture vote forward.

[101] While the eight parties of the so-called "change bloc" coalition formally had an absolute majority consisting of 62 Knesset members, one Yamina MK, Amichai Chikli, had already ruled out supporting the incoming government.

[106][107] The coalition collapsed when several mostly right-wing nationalist MKs withdrew their support, after the government failed to muster enough votes to extend legal protections to Jewish settlers in the West Bank.