The twenty-seventh government of Israel was formed by Benjamin Netanyahu of Likud on 18 June 1996. Although his Likud-Gesher-Tzomet alliance won fewer seats than Labor, Netanyahu formed the government after winning the country's first ever direct election for Prime Minister, narrowly defeating incumbent Shimon Peres. This government was the first formed by an Israeli national born in the state after independence in 1948.

The twenty-eighth government of Israel was formed by Ehud Barak of One Israel on 6 July 1999 after his victory in the May election for Prime Minister. Alongside One Israel, Barak included Shas, Meretz, Yisrael BaAliyah, the Centre Party, the National Religious Party and United Torah Judaism in his coalition. The parties formed a center-left coalition. United Torah Judaism left the government in September 1999 due to a dispute over the transport of a turbine on Shabbat.