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Israel's Prime Minister Benjamin Netanyahu reneged on his agreement to establish a new national broadcasting service on Sunday, and instead created an Israeli crisis coalition, indicating potential snap elections two years ahead of time.

The crisis emerged last week between Netanyahu and his Finance Minister, Moshe Kahlon.

The dispute concerned the fate of the state-run Israel Broadcasting Authority and the establishment of the Public Broadcasting Corporation (PBC).

Netanyahu initially insisted that the Israel Broadcasting Authority, Israel's first broadcasting body, must be shut down in order to be replaced by the new PBC.

However, according to local media, Netanhayu realized the PBC will be operated under less government control than he hoped, so he changed his mind and ordered the dissolution of the new broadcasting authority before April 30, the date it was scheduled to air its first broadcast.

Kahlon, head of the centrist Kulanu party, insisted that the PBC should start broadcasting as planned.

The crisis raised speculations that the dispute may lead to early elections, a move which would stall potential steps to renew peace talks with Palestinians under the new US administration of President Donald Trump.

It also comes amidst a criminal police investigation of Netanyahu over suspected corruption charges.

Some commentators speculated that early elections would postpone Netanyahu's possible indictment.

Netanyahu departed to visit China on Sunday, leaving the crisis behind him, with every news outlet in the country speculating on the potential snap elections and a simmering political arena with conjectures and talks of new political alliances.

On Saturday, Netanyahu told his Likud ministers that he would not hesitate to dissolve his government if Kahlon insisted on launching the PBC as scheduled.

Before traveling to China on Sunday, Netanyahu wrote on his Facebook page that Kahlon's insistence on maintaining the PBC was "unacceptable" and a breach of coalition agreements which oblige partners to vote unanimously on media communication issues.

"It was explicitly determined that all parties are obliged to abide by decisions made by our Likud party, the media communications issue, including closure of the corporation," Netanyahu wrote.

Netanyahu added that the Israel Broadcasting Authority agreed to reform itself and has already made budget cuts in order to operate more efficiently.

He said there was no need to close the Broadcasting Authority to establish a new one if the existing broadcasting body is less costly.

"To send home hundreds of families on the eve of [the Jewish holiday of] Passover, for what? There can be no situation where we, the Likud, with 30 mandates respect all clauses for smaller parties," he wrote.

Meanwhile, senior Likud ministers sparred over the election threat.

Defense Minister Avigdor Lieberman said early elections are "the last thing Israelis need."

Transportation Minister Yisrael Katz said that the dispute over the new broadcasting corporation does not justify another round of elections.

"There is no disagreement in this coalition on the main issues, and you don't change election dates over a media issue disagreement," he told Army Radio.

"The State of Israel doesn't need elections right now in my opinion, and I don't think it will happen. It's not in the state's best interest," he added.

Netanyahu's coalition, the most right-wing government in Israeli history, includes 67 members out of 120 Knesset, or parliament, members.

Kahlon's Kulanu party is a vital coalition partner, with 10 seats.