Netanyahu battles to save weakened ruling coalition

Israeli Prime Minister Benjamin Netanyahu's Likud party denied Friday that he had decided to call a snap election, as he battled to keep the government afloat after his defence minister quit over a Gaza ceasefire.

Netanyahu's ruling coalition was left with a single seat majority in parliament after the walkout on Wednesday by Avigdor Lieberman and his hawkish Yisrael Beitenu party.

Netanyahu held crunch talks on Friday with his other main right-wing rival, Education Minister Naftali Bennett, whose religious nationalist Jewish Home party has threatened also to quit unless he is given Lieberman's job.

But there were conflicting reports of their discussion, with a source close to Bennett telling AFP the two had agreed that "it would be senseless to continue" with the same coalition.

"They will set a date for elections when they meet with the (other) coalition partners on Sunday," the source said. Within minutes, a statement from Likud said that was incorrect.

"The prime minister told minister Bennett that rumours that a decision has been made to go to elections are not correct," the statement said.

It added that early next week the premier would consult leaders of the coalition parties.

"He trusts the ministers' sense of responsibility to keep them from making the historic error of bringing down a right-wing government," it said.

The Gaza ceasefire, which ended the worst flare-up between Israel and the territory's Islamist rulers Hamas since a 2014 war, faced its first major test on Friday, the day of the week when Palestinian border protests have typically peaked.

Thousands of demonstrators turned out at Gaza's frontier with Israel, an AFP reporter said, but most kept some distance from the border fence rather than seeking to damage or breach it as has been the case in the past.

Gaza's health ministry said that 14 Palestinians were wounded by Israeli army fire, two of them seriously.

The ceasefire announced Tuesday has drawn heavy criticism in Israeli communities near the border that faced barrages of rockets earlier this week.

Hundreds of people joined a demonstration in Tel Aviv on Thursday despite a promise from Netanyahu of more public money for emergency services.

They called for tougher action against Hamas which has portrayed the ceasefire and Lieberman's resignation as a victory.

Pro-Netanyahu freesheet Yisrael Hayom daily predicted that the prime minister would do all he could to avoid a general election while his hard-won security credentials were at issue.

"Holding elections with the fiasco in Gaza in the background cracks the image of the ultimate leader that he has built over the course of years," it said.

"The chances of stopping this speeding train appear impossible, but Netanyahu is still trying." The eight lawmakers of Bennett's far-right Jewish Home party are not the only threat to Netanyahu's razor-thin parliamentary majority.

Finance Minister Moshe Kahlon, whose centre-right Kulanu party hold 10 seats, has reportedly told Netanyahu that a snap election is necessary to provide a stable government to keep the economy on track.

But Yisrael Hayom said Bennett was key to efforts to avoid an early election and could yet prove Netanyahu's political salvation.

"Naftali Bennett as defence minister and Netanyahu as prime minister could together project stability and embark on a coordinated offensive against anyone who gets in the way," it said.

In a speech on Thursday, Bennett did not reiterate the resignation threat but made his case for why he should get the defence post.

"The most dangerous thing for the state of Israel is that we begin to think that there is no solution to terrorism, to terrorists, to missiles," he said. "There is a solution. When Israel wants to win, we will win." -