The surprise overnight announcement cancelling plans for early Israeli elections and establishing a Likud-Kadima national unity government (with an unprecedented 94 of 120 MKs in the coalition!) creates a win-win situation for Israel and for advocates of Israel.

This very broad-based new government should be able to tackle pressing domestic and foreign challenges with maximum clout and authority. It will bring needed political stability to Israel for the next 18 months, and should give Israel much-sought-after international legitimacy for its actions.

Indeed, many observers feel that a Likud-Kadima unity coalition should have been the natural result of Israel’s election three years ago, which saw the two main political parties finish in a dead heat (27 and 28 seats in parliament, respectively).

Working together now, they should be able to deal decisively with the three most vexing issues on the Israeli domestic agenda: replacing the Tal Law regarding equality in military service (the haredi draft issue); passing a new budget for 2013-2014; and reforming Israel’s electoral system. Perhaps the two major parties can also jointly put pressure on the Palestinians to come to the table for real peace talks.

At the same time, this dramatic development cannot be read as just another crafty re-jiggering of the Israeli political map. It very likely is also explained as preparation for tackling the biggest of all challenges: the Iranian nuclear threat.

Far-reaching and momentous decisions will have to be taken over the next 18 months regarding the Iranian nuclear weapons program – by the international community and by Israel. Prime Minister Benjamin Netanyahu’s government and inner cabinet now includes three former IDF chiefs-of-staff (Ehud Barak, Moshe Yaalon, and Shaul Mofaz), two of whom also served as defense ministers and two of whom served as chiefs of military intelligence. This in itself is a form of deterrence. This ought to give pause to the Iranians, and to stiffen the backs of the P5+1 negotiators meeting in Baghdad later this month.

The new decision-making triumvirate (or quintet) is also an important counter-weight to the nasty insinuations of “irresponsibility and messianism” in Israeli government decision-making regarding Iran made by former intelligence chiefs Dagan and Diskin.

Obviously, this political ‘big bang’ would not have taken place unless it also served the narrow political interests of all involved: Prime Minister Netanyahu of Likud, who sought and now has a very stable government to take him to the end of 2013; Shaul Mofaz of Kadima, who would likely have been decimated at the polls had elections been held in September; Ehud Barak of Atzmaut, who might have been altogether eliminated electorally; and Avigdor Lieberman of Israel Beiteinu, who had boxed himself and the coalition government into a corner on the issue of equitable military draft, and who faces legal difficulties.

The ‘big bang’ also significantly sets-back the political fortunes of Shelly Yachimovich’s surging Labor party and Yair Lapid’s hot new Yesh Atid party. They will now languish in opposition (or oblivion) for a long time, which suits both Likud and Kadima.

At the same time, enthusiasm for this broad-based new government ought to be tempered by a realization that the margins are limited for significant policy changes on the major issues discussed above. A new arrangement for pressurizing and incentivizing the Ultra-Orthodox to participate in the workforce and in national/military service will likely involve uncomfortable compromises. Next year’s budget will inevitably involve both painful austerity measures alongside increased military spending, leaving little room for servicing heightened demands for social and economic justice. Far-reaching reform of the political system will be difficult even with 94 MKs behind it. Drawing the Palestinians into negotiations without preconditions remains an iffy possibility.

Furthermore, the new coalition leaves the Knesset with almost no real opposition. It is hard to see how Labor, Meretz and the Arab parties – the only factions not in the government – can conduct serious parliamentary oversight.

Nevertheless, it is hard to escape the term “historic” in relating to today’s Israeli political developments, which hold the potential for changes that a vast majority of Israelis support. The new situation is, at the very least, unprecedented, and one hopes that Prime Minister Netanyahu will take best advantage of the unique opportunities open before him.