The Knesset’s narrow approval of Israel’s record 2026 state budget on March 29—featuring heavy defense spending and billions for Haredi institutions—averted snap elections triggered by the March 31 deadline, stabilizing Prime Minister Benjamin Netanyahu’s coalition government and providing short-term political security. This follows Netanyahu’s order on March 30 for a deeper military invasion into southern Lebanon amid escalating Hezbollah clashes and the ongoing Iran conflict, where Israeli strikes earlier in March targeted leadership. No active no-confidence votes, resignations, or major coalition fractures have emerged in the past 30 days, though sustained war pressures, public protests, and judicial proceedings could test unity. Traders should watch for Knesset dissension or diplomatic shifts, with Netanyahu hinting at possible elections by September.