Over the course of the last year, Israeli Prime Minister Benjamin Netanyahu made a series of decisions that took what seemed like an unassailable political position and turned into a shaky re-election. He choose to make an alliance with the faltering Kadima Party that soon unraveled rather than seek early an election in the fall of 2012 when he was at his strongest. His public grandstanding about President Obama’s stance on Iran and the slights he received from the White House was interpreted as an intervention in the U.S. election on behalf of Mitt Romney that did neither the Republican nor the prime minister any good. Then he merged his Likud Party with Avigdor Lieberman’s Yisrael Beitenu Party prior to the January Knesset election that served only to drive secular voters into the arms of upstart Yair Lapid’s Yesh Atid.

Given the paucity of credible opponents for the office of prime minister and the collapse of Israel’s political left none of this was enough to cost Netanyahu the election but the Likud’s haul of Knesset seats was less than he might have gotten a few months earlier had he avoided these mistakes. But as the PM conducts the negotiations to form a new government, it may be that he is about to commit another blunder. Though one should take any of the reports leaking out of the talks between the Israeli parties with more than a few grains of salt, right now it looks as if Netanyahu is on the verge of outsmarting himself again and setting up the Likud for a potential electoral disaster at the next election.

According to Haaretz, the first Israeli Party to accept Netanyahu’s invitation to join his government is something of a surprise: Tzipi Livni’s Hatnuah. Livni, a longtime Netanyahu antagonist who ran as a critic of the Likud’s stance on the peace process did poorly at the polls getting only six seats. But Netanyahu has nevertheless rewarded her with the post of Justice minister and leadership of peace negotiations with the Palestinians. In of itself that might not be such a dumb idea. Livni is desperate for office and sticking her with the thankless of job of negotiating with Mahmoud Abbas is setting her up for certain failure. But the problem here is that this seems to be part of a scheme to assemble a coalition involving the ultra-Orthodox Parties that is designed to marginalize Lapid as well as Naftali Bennett, the prime minister’s potent rival on his right who also came out of the voting a winner.

As Haaretz details, Netanyahu’s plan seems to be to create a 57-seat bloc without either Lapid or Bennett which will leave both the choice of joining the Cabinet on Netanyahu’s terms or being left in the cold. That would seem to be a clever way of cutting Lapid and Bennett down to size as well as to avoid pressure to adopt a far reaching plan to change the draft system to ensure the conscription of the ultra-Orthodox the same as other Israelis. It would give him a government that would offer cover on the peace process with the Americans while making sure that neither Lapid nor Bennett could topple him.

But if that is Netanyahu’s goal, he is missing a historic opportunity as well as sowing the seeds for defeat the next time Israelis vote.

The January vote presented the prime minister with the chance to do what had eluded every previous Israeli government: fix the Haredi draft problem. The combined strength of Likud, Yesh Atid and Bennett’s Habayit Hayehudi would ensure a solid majority that would easily be joined by smaller parties that would support a program of draft change and maybe even make election reform possible. That would enrage the two ultra-Orthodox Parties Shas and United Torah Judaism but they would be powerless to stop the measure. But Netanyahu seems to be more bothered by the prospect of an alliance with Lapid and Bennett — both of whom are feeling their oats since the election — than the prospect of allying himself again with the dead weight of the Haredim or even Livni.

Four years ago, it was Livni and her then powerful Kadima faction (it won 28 seats then but was whittled down to 2 under Livni’s successor) that passed up the opportunity to do something about the draft when her wounded pride prevented an alliance with Likud. But if he chooses to embrace Shas and UTJ at the expense of Lapid, this time it will be Bibi who will be blamed for another Haredi victory that will be deeply resented by most Israeli voters.

Even more dangerous for Netanyahu is the prospect that Lapid will be smart enough to stay out of a government in which Shas and UTJ will be able to veto draft reform. The prime minister appears to resent Lapid’s boasts that he will build on his 2013 success and be elected prime minister the next time around. But it looks as though he fails to understand that the surest path to that result will be to keep Lapid out of the cabinet rather than welcoming him into it.

Many independent centrists running on platforms calling for drafting the Haredim have done well in Israeli elections before. But all succumbed to the siren call of government office and were then co-opted by their major party rivals. The only way for Lapid to avoid that fate is precisely by not making the same mistake. The formula for election victory for any of those who hope to replace Netanyahu at the next election is to stay out of the Cabinet and to help lead the opposition to the prime minister. That’s something that the Labor Party’s Shelly Yacimovich seems to understand even better than Lapid.

It may be that before the negotiating is done, Netanyahu will have abandoned his ultra-Orthodox allies and swallowed his pride and have done a deal with Lapid and Bennett that will be good for his country and his political future. But if not, we may look back on what is going on this week in Israel as one more example of Netanyahu being too clever by half and setting the stage for his political undoing.