The surprise move to sack Yoav Gallant -- a hawk on the war against Hezbollah but who also pushed for a ceasefire and hostage release deal in Gaza -- came as voters choose a new president in the United States, Israel's top military backer.
Netanyahu and Gallant have frequently clashed over Israel's retaliatory military offensive against Hamas following the Palestinian militant group's deadly attack on Israel on October 7 last year.
"Over the past few months... trust has eroded. In light of this, I decided today to end the term of the defence minister," a statement from the Netanyahu's office said, adding that he had appointed foreign minister Israel Katz to take his place.
Shortly after his appointment, Katz vowed "victory over our enemies and to achieve the goals of the war", including "the destruction of Hamas in Gaza, the defeat of Hezbollah in Lebanon" and the return of hostages.
Gideon Saar, a minister without portfolio, was appointed to replace Katz as foreign minister.
After being fired, Gallant posted on X that Israel's security would remain his life's "mission".
He called on the government to bring home the hostages in Gaza while they were "still alive" and insisted that all Israelis of draft age must serve in the military.
The United States praised Gallant, a key intermediary with Washington, as "an important partner on all matters related to the defense of Israel."
"As close partners, we will continue to work collaboratively with Israel's next minister of defense," a State Department spokesperson said.
- Divisions 'grew wider' -
Netanyahu said he had made attempts to bridge his differences with Gallant.
"But they only grew wider. These divisions even reached public knowledge in an unusual manner and, worse, became known to our enemies, who... derived substantial benefit from them," he said.
Gallant and Netanyahu had also disagreed on the issue of exemption from military service for ultra-Orthodox men.
The sacked minister had been a key advocate for ultra-Orthodox Jews to be called up, but Netanyahu wanted their exemption to continue, fearing their conscription could break up his far-right coalition government.
Far-right National Security Minister Itamar Ben Gvir said Netanyahu "did well" to remove Gallant.
- Netanyahu 'emboldened' -
The reshuffle's timing comes at a critical juncture in the Gaza and Lebanon wars, with both Hamas and Hezbollah massively weakened.
Jonathan Rynhold of the political studies department at Bar-Ilan University told AFP Netanyahu is feeling "emboldened because he is improving in the polls".
"He is also taking advantage of the fact that the US election is happening today... everyone's focus is elsewhere," he said.
Aviv Bushinsky, a political commentator and former Netanyahu chief of staff, said Gallant's dismissal was just "a matter of time".
"Maybe Netanyahu fears that the Democrats will win and then it will be more even complicated" to fire Gallant, he said.
"I cannot recall an incident when Israel Katz was in opposition to Netanyahu," he said.
"Besides, Netanyahu thinks he can run the show himself."
Gallant's sacking sparked protests in Tel Aviv, where hundreds of people chanted anti-Netanyahu slogans and demanded the return of hostages held in Gaza.
Hamas's October 7 attack on Israel resulted in the deaths of 1,206 people, mostly civilians, according to an AFP tally of Israeli official figures.
Israel's retaliatory campaign has killed 43,391 people in Gaza, a majority of them civilians, according to Gaza health ministry figures which the United Nations considers to be reliable.
Hamas also seized 251 hostages in their attack, of whom Israel believes 63 people including two children are still alive in Gaza.
After Gallant's dismissal, the Hostages and Missing Families Forum campaign group in a statement urged Katz "to prioritise a hostage deal... to secure the immediate release of all hostages".
- Rockets and drones -
From the air and on the ground, Israeli forces pressed their multi-front campaign Tuesday against militants more than a year after the Gaza war began.
Authorities in Lebanon reported raids across the country.
The health ministry said an Israeli attack in a town south of Beirut killed 15 people, after an earlier strike on the coastal town of Jiyeh killed one person and wounded 20.
Hezbollah on Tuesday claimed it had fired rockets and drones into northern Israel, and also targeted Israeli troops near the border inside Lebanon.
Tuesday's fighting came more than a month into the Hezbollah-Israel war which has left at least 1,990 dead in Lebanon since September 23, according to an AFP tally of health ministry figures.
In neighbouring Syria, close to the border with Lebanon, the town of Al-Qusayr came under air attack for the second time in a week.
Israel's military said it carried out "an intelligence-based strike on weapons storage facilities used by Hezbollah's munitions unit".
Syria's official SANA news agency said Al-Qusayr industrial zone was hit and Israel "also targeted some residential buildings surrounding the industrial zone".
- West Bank deaths -
In the West Bank, which has seen spiralling violence since the October 7 attack, Palestinian officials said Israeli forces killed seven Palestinians in separate operations.
The Israeli military told AFP it had targeted "terrorists".
Israeli troops or settlers have killed at least 757 Palestinians in the West Bank since the start of the Gaza war, according to the Ramallah-based health ministry.
Palestinian attacks on Israelis have also killed at least 24 people in the same period in the West Bank, according to official Israeli figures.
Palestinians in Gaza told AFP that whoever wins Tuesday's US presidential election must end the conflict in the territory.
"We are hanging by a thread, and like every other people in the world, we are looking for someone who can stop the war," said Ayman al-Omreiti, 45, in Gaza City.
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