Israeli Prime Minister Benjamin Netanyahu's plan to annex parts of the West Bank has sparked significant political debate, raising concerns about potential instability. The move is expected to heighten tensions both domestically and internationally, with critics warning that it could destabilize Netanyahu's government by intensifying opposition within Israel and attracting international condemnation. Market reactions indicate a slight increase in the perceived risk of Netanyahu being ousted by June 2026, with YES pricing for this outcome rising to 4.5%. The annexation plan, amid Netanyahu's ongoing legal challenges, may polarize Israeli politics further, potentially affecting his re-election prospects and coalition dynamics.