But the departure of Benny Gantz does not immediately appear to threaten Netanyahu, who still controls a majority coalition in parliament.
For now, the Israeli leader becomes more heavily reliant on far-right allies who oppose the latest US-backed ceasefire proposal and want to press ahead with the war.
Gantz, a centrist who is seen as Netanyahu’s main political opponent, resigned after months of mounting tensions within the war Cabinet over Israel’s strategy in Gaza.
On October 7, Hamas militants killed some 1200 people in southern Israel and took about 250 hostages back to Gaza.
Since then, Netanyahu has pledged twin goals: defeating Hamas and bringing back the hostages.
But as the war has stretched on, many Israelis — including Gantz — have grown frustrated with the lack of progress to bring home the captives and to secure a ceasefire deal.
They say Netanyahu has placed his political survival ahead of the country’s interests, prolonging the war to avoid new elections and his corruption trial.
He threatened to leave the government on June 8 if Netanyahu did not endorse a plan to return hostages, end Hamas’ rule, demilitarise the Gaza Strip, establish an international administration of civilian affairs in Gaza, normalise relations with Saudi Arabia and widen military service to all Israelis.
When Netanyahu did not express support for the plan, Gantz announced his resignation.
He said “fateful strategic decisions” in the Cabinet were being “met with hesitancy and procrastination due to political considerations”.
Gantz’s departure from the war Cabinet returns him to his pre-war role of opposition leader in Israel’s parliament.
What does Gantz’s resignation mean for Israel’s government?
The move does not immediately pose a threat to Netanyahu, who controls a coalition with 64 of the 120 seats in parliament.
Gantz’s National Unity party joined the emergency government in the days after the Hamas attack in a show of solidarity.
The departure of Gantz, a former Defence Minister who is widely respected in Washington, will probably embolden and empower Israel’s ultranationalist ministers who have fiercely opposed all ceasefire deals.
Itamar Ben-Gvir and Bezalel Smotrich, two of the most extreme ministers within Israel’s unruly government, have called for Palestinians to be removed from Gaza and then for Israeli settlements to be re-established there.
It’s a policy the war Cabinet has so far ruled out.
Netanyahu pleaded with Gantz on Sunday not to resign: “This is the time for unity, not for division,” the Prime Minister said in a post on X.
What does the resignation mean for the war?
The United States publicised a ceasefire proposal in early June that Biden said Israel supported.
But with Gantz’s resignation, Netanyahu may now be tempted to disregard the proposal so he can preserve his government and stay in power.
US Secretary of State Antony Blinken called on Hamas on Tuesday to accept the proposal, saying the UN Security Council’s vote made it “as clear as it possibly could be” that the world supports the plan.
The US-backed ceasefire proposal includes a phased release of hostages in Gaza in exchange for Palestinian prisoners held by Israel, a surge of humanitarian aid into Gaza, a withdrawal of Israeli forces from the territory and a reconstruction effort.
The far-right members of Netanyahu’s coalition have threatened to leave the government if Israel does not press forward militarily in Gaza.
Their departure would fracture the government and lead to new elections in which Netanyahu would be likely to face a stiff challenge from Gantz.