So remember when I predicted that Shaul Mofaz and Kadima were going to remain in the coalition? Turns out, not so much. According to reports, Kadima is officially out over the failure of Mofaz and Bibi Netanyahu to bridge the gap between their parties over what will replace the Tal Law. Specifically, the sticking point is the age until which Haredim can defer the draft, with Mofaz insisting that Netanyahu’s proposal of allowing Haredim to defer until age 23 is unacceptable. And so with that, the curtain closes on the grand unity government experiment.

Why did I get this wrong? I think I underestimated the humiliation and credibility factors for Mofaz. He has been threatening to pull out for weeks, and each time he issued a threat and Bibi called his bluff, it turned into a hollow one. There were only so many times Mofaz could allow that to happen, and my assumption that the overarching political considerations (more on that in a moment) would trump the more personal ones was pretty obviously faulty. I also underestimated the degree to which Netanyahu was going to remain in thrall to the Haredi parties, since the logic of creating the larger coalition was precisely so that he wouldn’t have to be held hostage to the demands of Shas and Eli Yishai. Unlike some others, I did not think that the Likud-Kadima agreement was about Iran, and unless Mofaz is actually leaving because a strike is imminent and he wants no part of it, the Iran factor was clearly overhyped by some. Given Netanyahu’s unwillingness to do what he could to keep Kadima in the coalition following his establishment of the Plesner Committee, which signaled his intention to let Kadima lead on the Tal Law, I am confused as to what his original intention was. It was obvious to me at the time that it was not about Iran or the peace process, and I assumed it was to give him maneuvering room for equalizing the burden of service and upsetting his Haredi coalition partners and for ignoring the extreme faction within Likud on his right. That he let the unity government fall apart like this is puzzling to me, since while Mofaz walks away from this looking weak and like a buffoon, so does Netanyahu to a lesser extent. Make no mistake, the Kadima position on this is a lot more popular with Israelis than the Likud/Shas position, and Netanyahu just lost an opportunity to score some very easy political points while at the same time doing the right thing by not letting Haredim avoid their duties to the state.

So, assuming that my analysis still carries some credibility, what comes next? To begin with, Kadima leaving does not alter the fact that Netanyahu still has a governing coalition that agrees on most rightwing issues. In fact, he is going to have a larger coalition than he did before the deal with Mofaz, because a bunch of Kadima MKs are now going to break off and join Likud. I thought this was going to happen both before the unity deal and after the unity deal, and the only difference now is that Mofaz himself will not be going with them. Netanyahu is still going to have to reconcile the fact that Shas and UTJ want to maintain the status quo on the draft and Yisrael Beiteinu does not, but this juggling act might be easier to manage depending on how many Kadima MKs break away from their current home and join their former home. I have seen early reports that it will be at least 7, and it might grow to more. So while Netanyahu’s life is more difficult today than it was yesterday, he is still in good shape and will head into elections in early 2013 in a strong position.

As for Kadima, this misguided move today is going to be the final nail in the coffin. Mofaz is first going to have to deal with a rump party following the MKs who break off and head for Likud, not to mention the other group of 7 that wanted to break away in May and start a new party to be headed by Tzipi Livni and Haim Ramon. Then there is the problem that Kadima has essentially transformed itself from one single issue party (disengagement from Gaza) to another single issue party (equalizing the burden of service), and while this is a popular issue, it is not enough to sustain a viable party (Kadima’s new slogan is apparently “Kadima L’Shareit” which means Kadima, To Serve, or more literally Forward, To Serve). Mofaz still has no real credibility on social justice issues, and what little benefit of the doubt anyone was willing to grant him vanished into thin air the day he joined forces with Bibi. So what’s left for him? There is no way that Netanyahu and Likud are now going to adopt any policy that even resembles what Kadima was proposing on the universal draft, and there might even be enough defections from Kadima one way or the other to knock Mofaz out of being leader of the opposition. Even if Kadima retains enough members to be the largest opposition party, Mofaz will be left shouting into the wind on this issue and does not have enough of a base or a coherent set of policies to prevent Kadima from getting decimated in the next election. The bottom line here is that this is an enormous loss for Mofaz; he was outmaneuvered by Bibi, made his situation much worse by issuing a stream of threats to leave despite his bluff being repeatedly called, and now his party is almost certainly fated to disappear and he has ruined his own chances of being welcomed back into Likud with open arms. No matter which way you view this, today was the most epic of fails for Shaul Mofaz, and Netanyahu gets to remain right where he was.