Israel Prime Minister Netanyahu's pre-indictment hearing begins today

Israeli Prime Minister Benjamin Netanyahu faces a key day Wednesday in his attempt to remain premier, with both a hearing into corruption allegations against him and his unity government talks nearing a dead end.

The hearing came as deadlocked results from a 17 September general election leave Netanyahu plotting how to survive politically and continue his reign as Israel's longest-serving prime minister.

To do so, he will have to navigate the twin challenges of a potential corruption indictment against him in the weeks ahead and election results that give neither him nor his challenger Benny Gantz a clear path to a majority coalition.

Both collided Wednesday, when Israel's attorney general convened a pre-indictment hearing for Netanyahu after having said he intends to charge him with bribery, fraud and breach of trust.

Only Netanyahu's lawyers and not the premier himself are expected to attend the closed-door hearing, which gives him a final chance to convince Attorney General Avichai Mandelblit he should not be indicted.

The hearing is to last four days, covering three separate cases in which Netanyahu is accused of acting on behalf of wealthy supporters and businessmen in exchange for gifts or favourable news coverage.

Netanyahu, who denies all the allegations, asked that the hearing be broadcast live because he has "nothing to hide".

Mandelblit dismissed the request in no uncertain terms, saying the hearing was intended to convince the legal authorities, not the public.

Following the hearing, the attorney general's deliberations on whether to issue the indictments are expected to continue for weeks.

His lawyers expressed confidence as they entered the hearing.

'Last effort'

While the hearing is underway, Netanyahu may be preparing to inform President Reuven Rivlin he is unable to form a government after being tasked with doing so a week ago.

Negotiators for Netanyahu's right-wing Likud had intended to meet with Gantz's centrist Blue and White on Wednesday as part of so far unsuccessful efforts to hammer out a unity government.

Netanyahu had also sought to meet Gantz later Wednesday.

But Blue and White announced late Tuesday that there was no reason for either meeting now since "pre-conditions" it sought for further talks were not met.

Both sides held out hope for a change of heart by their opponents, but Netanyahu had already labelled Wednesday's talks a "last effort".

Should he follow through with the negotiating tactic and tell Rivlin he cannot form a government, the president must then decide whether to ask Gantz to try.

Alternatively, Rivlin could call on parliament to agree on a candidate for prime minister with a vote of at least 61 of 120 members.

Netanyahu and Gantz have traded blame over failed efforts so far to reach a deal.

They are divided on a range of issues, but one major point: who would be prime minister first in a unity government.

Gantz argues that since his party finished as the largest, with one seat more than the Likud, he should be prime minister first under any rotation arrangement.

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He also says Blue and White cannot be part of a government with a prime minister facing indictment.

Netanyahu says even though Likud has fewer seats, more of the smaller parties in parliament back him.

He wants to negotiate based on a compromise Rivlin proposed, which could see him remain prime minister for now but step aside if indicted while retaining the title.

Gantz would step in as acting prime minister in the interim.

'Game of chicken'

Both are engaged in a game of "chicken" and the result could be yet another election - a third in the space of a year after April polls also ended inconclusively, said Gideon Rahat of Jerusalem's Hebrew University and the Israel Democracy Institute think tank.

In that case, much will depend on who the public blames for causing a third vote, he said.

"It's all about threats," said Rahat.

"In the game of chicken, sometimes the result is that both drivers are killed. And that would be like chicken: We'll have third elections because nobody will move."

However, it could also buy Netanyahu time as he awaits the attorney general's decision, and while it seems a long shot, holding a third election as soon as possible may allow it to occur before indictments are issued.

Both Gantz and Netanyahu have already begun seeking to lay blame in case another election is called as it is likely to spur public anger.

Rahat said he believed a unity government would have already been formed if Netanyahu were not at the helm, but Likud members have so far shown no sign of an insurrection against him.

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Though weakened, Netanyahu may still emerge victorious, at least temporarily, said Rahat.

"Yes, he can," said Rahat, when asked if Netanyahu could in the end remain prime minister despite the multiple challenges.

But "he lost some of his magic".

This story has been updated to reflect that the hearing has been convened. This version also includes a quote from Netanyahu's lawyer.

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