PM Benjamin Netanyahu during interview. Photo: GPO.

Israel’s Economy Minister Naftali Bennett said Tuesday that he and Prime Minister Benjamin Netanyahu have made a “new covenant, which will replace the covenant with [Finance Minister Yair] Lapid,” according to Israel’s NRG News.

The news came not long before Netanyahu opted to fire Lapid and Justice Minister Tzipi Livni, Tuesday evening, according to Israel Radio. Netanyahu is scheduled to hold a press conference on the dissolution of the Knesset parliament, in order to hold early elections, later this evening.

“In recent weeks, Lapid and Livni strongly attacked my government. I will not tolerate an opposition within the government,” anymore, Netanyahu said in a statement sent to reporters.

Lapid’s reply was not long in coming.

“Prime Minister Netanyahu has failed in his management of the country and in dealing with the needs of the Israeli public. The firing of ministers is an act of cowardice and loss of control,” Lapid said in a statement to reporters.

Livni, the Hatnua Party chairwoman, got the news of her firing personally, in a call from Netanyahu himself, according to sources in her party.

“It’s a pity you did not have the courage to do it eye-to-eye,” Livni replied to Netanyahu, according to Ynet News.

In private discussions during a visit to the Samaria (West Bank) Jewish community of Bet El on Tuesday, Bennett, the leader of the Jewish Home party, said that his previous accord with Lapid was “a serious mistake that I would not repeat, and will not repeat in the future.”

Bennett said that the current crisis between the PM and his coalition partners lies in the fact that Lapid and Livni publicly criticized Israeli policy on Jerusalem in talks abroad.

Bennett and Netanyahu spoke on the phone before Netanyahu went into his fateful meeting with Lapid on Monday. According to Bennett, Netanyahu said that “even Ehud Barak did not talk like that abroad.”

Barak led the opposition Labor Party until January 2011; he also served as prime minister from 1999-2001, and as defense minister.

On Monday, Bennett spoke with Netanyahu and the two pledged “to back up each other during the election campaign, rather than engage in mutual slander.” However, Bennett said that the Likud party and Jewish Home “would not form a common list of candidates in upcoming elections in view of the significant differences between the parties.

“We are going into the elections with all of our might, and I’m not willing to give the National Union more than two seats,” Bennett said, referring to tensions within the Jewish Home party, adding, “If they want to run in the primaries. I’m not sure they’ll agree, and I fear that they will run with Michael Ben-Ari and split the national religious camp. Uri Ariel and his friends will destroy our chances for status and influence in the next government.”

Since the announcement of the explosion between Netanyahu and Lapid, mutual recrimination has been rife in both camps casting blame for the dissolution of the coalition.

The Prime Minister’s Office (PMO) responded to Lapid’s allegations, claiming that the PM cooked up an”old-fashioned ugly deal” with the ultra-Orthodox parties, and accusing him of “national irresponsibility” following the failure of their discussion Monday night night.

“Yair Lapid failed miserably in managing the economy,” a PMO official said.

“He humiliated himself and failed in his attempt to lure the ultra-Orthodox into plotting a putsch against the prime minister,” said a source in the Likud. “Lapid continues to lash out, threatens to undermine the government in which he serves, and concocts a political deal with Tzipi Livni – all from a politically narrow, old-fashioned and ugly mindset.”

Netanyahu, according to the Likud source, “insists that the state budget will be responsible and will ensure security, and the continued bolstering of the IDF’s strength, and will truly look after housing and food prices – as opposed to the irresponsible political budget that Lapid is promoting.”

Lapid, for his part, said that he was “sad to see that the Prime Minister has chosen to act without consideration for the national interest and to drag Israel to unnecessary elections which will harm the economy and Israeli society, all for narrow political interests and a surrender to the ultra-orthodox parties, the powerful central committee of the Likud and outside lobby groups.”