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Following Avigdor Lieberman's resignation as Defense Minister in November 2018, Bennett announced that he was seeking the position for himself. On 16 November 2018 a Likud Party spokesman announced that Netanyahu had rejected Bennett's request and that Netanyahu himself would take the position instead. It was then announced that Bennett's Jewish Home Party would no longer be affiliated with Netanyahu's government, but on 19 November Bennett reneged on his pledge to withdraw from Netanyahu's coalition.

In December 2018 Bennett was among the Jewish Home MKs to leave the party and form the breakaway New Right party. In the 2019 Knesset elections, New Right narrowly failed to cross the electoral threshold; as a result, Bennett did not gain a seat in the 21st Knesset. In June 2019 Netanyahu dismissed Bennett from the government.

In October 2016 Bennett said, "On the matter of the Land of Israel, we have to move from holding action to a decision. We have to mark the dream, and the dream is that Judea and Samaria will be part of the sovereign State of Israel. We have to act today, and we must give our lives. We can't keep marking the Land of Israel as a tactical target and a Palestinian state as the strategic target."

In November 2016 Bennett said the election of Donald Trump as President of the United States gave him hope that the two-state solution would no longer be considered viable, claiming, "The era of the Palestinian state is over."

After being reelected in the 2015 elections, Bennett was appointed Minister of Education and retained the Diaspora Affairs portfolio in the new government. In 2015, Netanyahu split the Ministry of Jerusalem and Diaspora Affairs, initially taking back the Jerusalem Affairs portfolio for himself. He later appointed Ze'ev Elkin to the role of Jerusalem Affairs Minister.

In October 2015 Bennett resigned from the Knesset in order to allow Shuli Mualem to take his seat. His resignation took place under the Norwegian Law, which allowed ministers to resign their seats when in the cabinet but return to the Knesset if they leave the government. He returned to the Knesset on 6 December 2015 after Avi Wortzman opted to vacate his seat, having temporarily had to resign as a minister in order to do so.

He suggests a tripartition of the Palestinian territories, whereby Israel would unilaterally annex Area C, authority over the Gaza Strip would be transferred to Egypt, and Area A and Area B would remain with the Palestinian National Authority, but under the security umbrella of the Israel Defense Forces and Shin Bet to "ensure quiet, suppress Palestinian terrorism, and prevent Hamas from taking over the territory". Area C constitutes 62% of the area, and approximately 365,000 people live in Israeli settlements. Palestinians who live in this area would be offered Israeli citizenship or permanent residency status (between 48,000, according to Bennett, and 150,000, according to other surveys). Finally, Israel would invest in creating roads so Palestinians can travel between Areas A and B without checkpoints, and invest in infrastructure and joint industrial zones, because "Peace grows from below — through people, and people in daily life". Bennett also resists immigration of Palestinian refugees now living outside the West Bank, or the connection between the Hamas-controlled Gaza Strip and the West Bank. In 2011 he noted that there were about 50 factories in the West Bank industrial region where Israelis and Palestinians work together, and cited this as one workable approach to finding peace between the two sides.

In December 2014 a group of academics who oppose the Boycott, Divestment and Sanctions movement and members of The Third Narrative, a Labor Zionist organization, called on the U.S. and E.U. to impose sanctions on Bennett and three other Israelis "who lead efforts to insure permanent Israeli occupation of the West Bank and to annex all or parts of it unilaterally in violation of international law". The academics, calling themselves Scholars for Israel and Palestine (SIP) and claiming to be "pro-Israel, pro-Palestine, pro-peace", asked the U.S. and EU to freeze Bennett's foreign assets and impose visa restrictions. Bennett was chosen as a target for proposed sanctions because of his work in opposing the 2010 settlement freeze while he was director of the Yesha settlements council, actively supporting annexation of over 60% of the West Bank, and "pressing strongly for a policy of creeping annexation."

Bennett also implemented reforms to lower Israel's high food prices. Under his oversight, import duties and barriers were reduced, and mechanisms were set up to ensure more competition in the Israeli food industry. These reforms have been credited with a decline in Israeli food prices that began in April 2014 and continued throughout the rest of the year and into 2015. According to a Haaretz editorial, however, a fall in global commodity prices and dire financial straits among many Israeli consumers prompted the decline, not the reforms.

Following his election to the Knesset, Bennett had to renounce his U.S. citizenship, which he held as the son of American parents, before he could take his seat. He was appointed Minister of the Economy and Minister of Religious Services in March 2013. In April 2013 he was also appointed Minister of Jerusalem and Diaspora Affairs. As a senior Cabinet Member, he plays a major role in financial, political and security affairs.

In response to Israel's release of Palestinian prisoners in 2013, Bennett said Palestinian terrorists should be shot, allegedly adding, "I already killed lots of Arabs in my life, and there is absolutely no problem with that". Bennett was widely condemned for these words, though he denied saying them, claiming he said merely that "terrorists should be killed if they pose an immediate life threat to our soldiers when in action".

In January 2013 Bennett said, "There is not going to be a Palestinian state within the tiny land of Israel", referring to the area from the Jordan River to the Mediterranean Sea. "It's just not going to happen. A Palestinian state would be a disaster for the next 200 years."

As Economy Minister, Bennett oversaw a new strategy by Israel to increase trade with emerging markets around the world and reduce trade with the European Union, so as to diversify its foreign trade. The two main reasons for this shift are to take advantage of opportunities in emerging markets and to avert the threat of possible EU sanctions on Israel over the Israeli-Palestinian conflict. Bennett acknowledged that he was seeking to reduce Israel's economic dependence on the EU to reduce its influence on Israel. According to the Financial Times, Bennett is the primary architect of this economic pivot. Under his leadership, the Economy Ministry began opening new trade attaché offices in Asia, Africa, and South America, and also began closing some trade offices in Europe and consolidating others with offices in neighboring countries. As part of this process, Bennett opened negotiations with Russia and China on free trade agreements, oversaw continuing negotiations with India for a free trade agreement, and led economic delegations to China and India. While attending the World Trade Organization Ministerial Conference of 2013 in Bali, Indonesia, Bennett held talks with delegations from some unspecified countries on the possibility of future free trade agreements.

In April 2011, together with Ayelet Shaked, he co-founded My Israel, which claims to have 94,000 Israeli members. In April 2012 he founded a movement named "Yisraelim" – i. e., "Israelis". The movement's main goals include increasing Zionism among centre-right supporters, increasing dialogue between the religious and secular communities, and promoting "The Israel Stability Initiative". Subsequently, Bennett resigned from the Likud and joined The Jewish Home, while announcing his candidacy for the party leadership. In the internal elections on 6 November 2012 he won 67% of the vote, and was elected head of The Jewish Home. In the 2013 legislative elections Bennett led the party to win 12 seats in the 19th Knesset.

In February 2012 Bennett published a plan to manage the Israeli–Palestinian conflict called "The Israel Stability Initiative." The plan is based in part on parts of earlier initiatives, "Peace on Earth" by Adi Mintz and the "Elon Peace Plan" by Binyamin Elon, and relies on statements of Netanyahu and Likud party ministers in favor of unilateral annexation of the West Bank. Bennett opposes the creation of a Palestinian state: "I will do everything in my power to make sure they never get a state."

After taking part in the 2006 Lebanon War, Bennett joined the Leader of the Opposition, Benjamin Netanyahu, and served as his Chief of Staff from 2006 to 2008. He led a team that developed Netanyahu's educational reform plan. He also ran Netanyahu's primary campaign to lead the Likud party in August 2007. On 31 January 2010 Bennett was appointed director-general of the Yesha Council and he led the struggle against the settlement freeze in 2010. He served in this position until January 2012.

Born and raised in Haifa, the son of immigrants from the United States, Bennett served in the Sayeret Matkal and Maglan special forces units of the Israel Defense Forces, taking part in many combat operations, and subsequently became a software entrepreneur. In 1999, he co-founded and co-owned the US company Cyota, operating in the anti-fraud space, focused on online banking fraud, e-commerce fraud, and phishing. The company was sold in 2005 for $145 million. He has also served as CEO of Soluto, an Israeli cloud computing service, sold in 2013 for a reported $100–130 million. He entered politics in 2006, serving as Chief of Staff for Benjamin Netanyahu until 2008. In 2011, together with Ayelet Shaked, he co-founded the My Israel extra-parliamentary movement. In the 2013 Knesset elections, the first contested by The Jewish Home under Bennett's leadership, the party won 12 seats out of 120.

Bennett moved to the Upper East Side of Manhattan to build a career as a software entrepreneur. In 1999 he co-founded Cyota, an anti-fraud software company, and served as its CEO. The company was sold in 2005 to RSA Security for $145 million, making Bennett a multimillionaire. A stipulation of the deal allowed the Israeli arm of Cyota to remain intact. As a result, 400 Israelis are employed at the company's Israeli offices in Beersheba and Herzliya. Bennett has also served as the CEO of Soluto, a technology company providing cloud-based service that enables remote support for personal computers and mobile devices in 2009, at a time when he and partner Lior Golan were engaged in raising funds for myriad Israeli technology startup companies. Soluto had hitherto raised $20 million from investors, including venture capital funds Giza Venture Capital, Proxima Ventures, Bessemer Venture Partners, Index Ventures, Michael Arrington's CrunchFund, Eric Schmidt's Innovation Endeavors and Initial Capital. The sale of Soluto for a reported $100–130 million to the American company Asurion was finalized in October 2013.

Bennett was drafted into the Israel Defense Forces in 1990. He served in the Sayeret Matkal and Maglan commando units as a company commander; he continues to serve in the reserves today with the rank of major. Bennett served in the Israeli security zone in Lebanon during the 1982–2000 South Lebanon conflict. He took part in many operations, including Operation Grapes of Wrath. After his IDF service, Bennett received a law degree from the Hebrew University of Jerusalem. During the 2006 Lebanon War he was called up as a reservist in the Maglan special forces unit and participated in a search and destroy mission behind enemy lines, operating against Hezbollah rocket launchers.

Naftali Bennett (Hebrew: נַפְתָּלִי בֶּנֶט ; born 25 March 1972) is an Israeli politician who led the Jewish Home party between 2012 and 2018 and currently serves as an MK for New Right. Between 2013 and 2015, he held the posts of Minister of Diaspora Affairs, Minister of Economy and Minister of Religious Services. From 2015 he continued as Minister of Disapora Affairs and became Minister of Education. From 2019 to 2020 he was Minister of Defense

Naftali Bennett was born in Haifa, Israel, on 25 March 1972. He is the youngest of three sons born to Jim and Myrna Bennett, American Jewish immigrants who moved to Israel from San Francisco in 1967, a month after the Six-Day War. His father's Jewish roots come from Poland, Germany, and the Netherlands. His maternal grandparents moved to San Francisco from Poland 20 years before the outbreak of World War II, and relocated to Israel as seniors, settling on Vitkin Street in Haifa. Some of his mother's other family members who remained in Poland were murdered in the Holocaust. Both of Bennett's parents observed Modern Orthodox Judaism. After moving to Israel, they volunteered for a few months at kibbutz Dafna, where they studied the Hebrew language, then settled in the Ahuza neighborhood of Haifa. Jim Bennett was a successful real estate broker turned real estate entrepreneur. Myrna Bennett was the deputy director general of the Association of Americans and Canadians in Israel's northern program. When Bennett was four, the family moved to Montreal for two years as part of his father's job. Upon returning to Haifa, Bennett began attending Carmel elementary school. When he was in second grade, the family moved to New Jersey for two years, again as part of his father's job. The family returned to Haifa when Bennett was ten.