1999 Israeli general election

In the Israeli–Palestinian peace process, although the Likud government had negotiated the Wye River Memorandum and it had passed the Knesset overwhelmingly in November 1998, subsequent negotiations with the Palestinians were going badly. The lack of progress had alienated support for the government on the left, as well as on its right. The left claimed negotiations were moving too slowly, while the more extreme right were unhappy with the contemplated territorial concessions included in the memorandum itself.

The Likud–Gesher–Tzomet alliance had fallen apart, with more members leaving Likud to set up Herut – The National Movement and the Centre Party.

Netanyahu's government finally gave up the ghost due to difficulties in passing the state budget and in January 1999 passed a bill calling for early elections.

Ehud Barak, the leader of the main opposition Labor Party, was Netanyahu's main contender in this election. Before the elections, Ehud Barak's Labor Party formed an alliance with Gesher and Meimad called One Israel in the hope that a united front on the centre-left would give them enough seats to form a more stable coalition.

The rising death toll and lack of military victory in Israel's long-running occupation in south Lebanon had soured voter support for the Likud policy.

Party		Votes	%	Seats	+/–
	One Israel	670,484	20.26	26	−11
	Likud	468,103	14.14	19	−8
	Shas	430,676	13.01	17	+7
	Meretz	253,525	7.66	10	+1
	Yisrael BaAliyah	171,705	5.19	6	−1
	Shinui	167,748	5.07	6	New
	Centre Party	165,622	5.00	6	New
	National Religious Party	140,307	4.24	5	−4
	United Torah Judaism	125,741	3.80	5	+1
	United Arab List	114,810	3.47	5	−1
	National Union	100,181	3.03	4	New
	Hadash	87,022	2.63	3	−1
	Yisrael Beiteinu	86,153	2.60	4	New
	Balad	66,103	2.00	2	+1
	One Nation	64,143	1.94	2	New
	Pnina Rosenblum	44,953	1.36	0	New
	Power for Pensioners	37,525	1.13	0	New
	Ale Yarok	34,029	1.03	0	New
	The Third Way	26,290	0.79	0	–4
	Green Party	13,292	0.40	0	New
	Tikva	7,366	0.22	0	New
	Casino Party	6,540	0.20	0	New
	Lev LaOlim	6,311	0.19	0	New
	Negev Party	4,324	0.13	0	New
	Tzomet	4,128	0.12	0	New
	Natural Law Party	2,924	0.09	0	New
	Progressive Center Party	2,797	0.08	0	New
	Da'am Workers Party	2,151	0.06	0	0
	New Arab Party	2,042	0.06	0	New
	Justice for All	1,257	0.04	0	New
	Moreshet Avot	1,164	0.04	0	New
Total		3,309,416	100.00	120	0
Valid votes		3,309,416	98.09
Invalid/blank votes		64,332	1.91
Total votes		3,373,748	100.00
Registered voters/turnout		4,285,428	78.73
Source: IDI, Nohlen et al.

Yisrael Beiteinu gained a seat after the vote-sharing process was completed.

After winning the Prime Ministerial elections, Ehud Barak formed the 28th government of Israel on 6 July 1999. His coalition included One Israel, Shas, Meretz, Yisrael BaAliyah, the Centre Party, the National Religious Party and United Torah Judaism, and initially had 16 ministers, though the number later rose to 24. Avraham Burg was appointed as Speaker of the Knesset.

United Torah Judaism left the coalition in September 1999 after a breach of the Sabbath. The government finally collapsed on 10 December 2000 when Barak resigned in the face of the outbreak of the Second Intifada and the Israeli Arab riots of October. Barak called new elections for the position of Prime Minister, which he lost to Ariel Sharon.

Sharon formed the 29th government on 7 March 2001. He set up a national unity government, including Likud, Labor-Meimad, Shas, the Centre Party, the National Religious Party, United Torah Judaism, Yisrael BaAliyah, and National Union-Yisrael Beiteinu. Sharon's government had 26 ministers, which later rose to 29, necessitating the addition of a small table to the end of the Ministers row in the Knesset.

During the Knesset term there were several splits, mergers and defections. The One Israel alliance broke into its constituent parts, Labor-Meimad (25 seats) and Gesher (2 seats). Five members left the Centre Party, with three forming New Way and two establishing Lev, which immediately merged into Likud. Later, two of the three that set up New Way resigned from the Knesset and were replaced by Centre Party members, whilst the remaining New Way MK joined Labor-Meimad. Two MKs left Yisrael BaAliyah to establish the Democratic Choice, whilst three MKs left the United Arab List; two established the Arab National Party and one formed National Unity – National Progressive Alliance. Michael Kleiner left the National Union to establish Herut – The National Movement, whilst the National Union became allied to Yisrael Beiteinu. Ahmed Tibi left Balad to establish Ta'al.