The Israeli Prime Minister, Mr Benjamin Netanyahu, is said to be considering seriously calling early general elections - possibly as soon as this winter, two years ahead of schedule.
His aides are crowing that the likelihood of a second Netanyahu victory has never been better, given that the main opposition Labour Party has probably alienated a crucial swathe of potential voters, by failing to crack down on a leading member who made racist remarks about the country's Sephardim (Jews of Middle Eastern origin).
Mr Netanyahu has stalled for more than a year on a deal with the Palestinians over Israel's withdrawal from another chunk of occupied West Bank territory, fearful that approval for the pullout might trigger an exodus of hardliners from his coalition and the consequent collapse of his government.
Mr Amr Moussa, the Egyptian Foreign Minister, observed yesterday that the latest Israeli-Palestinian talks on the deal, which have sputtered unproductively for the past fortnight, were "a waste of time". And a Palestinian minister, Mr Nabil Sha'ath, warned at the weekend that, unless Israel accepts the US package for a 13 per cent withdrawal, the negotiations will be called off in the next few days.
But the Prime Minister's aides say privately that Mr Netanyahu may now wrap-up the West Bank deal and then dissolve the coalition, confident that he can present himself as a leader who, having driven one tough bargain, can be relied upon to get the best terms for Israel in the next round of negotiations - critical talks on a permanent Israeli-Palestinian peace settlement.
For all the withering international criticism of his policies, Mr Netanyahu has fared quite well in the opinion surveys here since taking office 26 months ago. Nevertheless, the Israeli electorate is volatile, and history has made a habit of punishing prime ministers who go early to the polls. What appears to be tilting the balance in the Prime Minister's favour is the abject performance of his main rival, the Labour Party leader, Mr Ehud Barak.
Last week, one of Mr Barak's closest allies and a former army comrade, Mr Ori Orr, ill-advisedly told a newspaper of his dismay at the closed-mindedness and exaggerated ethnic sensitivities of Sephardim. Although Mr Barak has been energetically courting Sephardi voters, he was slow to censure Mr Orr, and is adamantly resisting pressure, from most of his Labour leadership colleagues, to call for Mr Orr's resignation from the Knesset.
Sephardim have been lining up on TV news shows to denounce Mr Orr and the Labour Party that shelters him, and Mr Netanyahu is sure to reap the political benefit.