Benjamin Netanyahu, Israel's conservative and hawkish prime minister, has called for early elections – now set to take place eight months ahead of schedule on 22 January 2013.

Currently, there are no other serious contenders for the job. New polls indicate that Netanyahu (or "Bibi") is extremely likely to win, and his Likud party is expected to take a majority of seats in parliament.

So why call for early elections?

Bibi holds all the cards, unless ...

The answer is not surprising: Bibi has a set of ulterior motives. While his formal reason may be related to Israel's 2013 budget, there is much more at stake. Bibi holds the cards on if and when Israel will strike Iran, and he will also dictate the future of the world's most intractable conflict: the Israeli-Palestinian issue. In addition, he has an incentive to pre-empt a potential threat from a centrist opposition led by former PM Ehud Olmert, who appears to be emerging from years of legal troubles.

So here are the seven factors that influenced Bibi's calculation – and why they matter not only for the Israeli people, but for the rest of the world. While Netanyahu's re-election seems likely, it's not guaranteed, particularly if the spirit of last summer's remarkable social protests can be turned into votes.

The 'official' reason

1. The formal political reason – confirmed by Bibi himself – is that he didn’t have the support necessary in his own government to pass the desired 2013 budget. That budget includes a series of austerity measures that other parties worry will negatively affect their poll numbers. In the lead up to the election, coalition parties are looking to appease their voters, many of whom do not support the proposed cuts to social services, and so they’ve refused to support it.

The fear that the new budget could hurt poll numbers is very real. Last year hundreds of thousands of people protested in Israel – as they did across Europe and the US – demanding social welfare reform, not budget cuts. This powerful demonstration of the people's will hurt the government. By holding elections before pushing through his budget, Bibi could win more support for it. He's also maneuvering to prevent renewed anti-austerity protests from affecting his chance of re-election. Unless the spirit of last year's social protest movement is reignited, the Israeli people are likely to see cuts to valued social programmes in the not too distant future.

The geopolitical reasons

2. Since taking office, Bibi has made his main priority crystal clear: to stop Iran’s nuclear ambitions. At the UN last month, he claimed that Iran would reach the "red line" for preemptive Israeli strikes – 90% of the way to making a warhead – by the spring of 2013. By moving up the election, Bibi is working to strengthen his hand in advance of a possible attack on Iran.

Early elections also ensure that he won't have to campaign for re-election in the middle of a possible future crisis with Iran, one that could dampen his popular appeal and call into question any mandate he tried to claim to wage a war against Iran. The consequences of such a war would be disastrous – and could trigger a much larger conflict in an already volatile region.

3. The US presidential election is also a factor. Tensions are growing between Netanyahu and President Barack Obama as the two fail to see eye to eye on issues like Iran’s nuclear programme and Israeli settlements in the West Bank. (Netanyahu’s perceived support for Mitt Romney hasn't helped). If Bibi is re-elected in January, just when the next US president takes his oath of office, he will start his term with a clear popular mandate – and the leverage that comes along with that public support.

This position of strength would help Bibi withstand any pressure from the US on Iran and the issue of Palestinian statehood, should Obama be re-elected. Freed from domestic electoral concerns, Obama could use a second term to push Israel more forcefully to stop settlement expansion, and to begin meaningful negotiations and difficult compromises with the Palestinians. More force from Washington could also embolden Palestinian leaders to push more aggressively for their own state, as public discontent and fears of more violence grow. Netanyahu will want as much public legitimacy as possible to face down any sustained pressure for a fair and just peace, whether from Washington or Ramallah.

The 'insider politics' reasons

4. In May 2012, Bibi reached a secret deal with opposition leader Shaul Mofaz (of the less extreme Kadima party, itself an offshoot of Likud). The agreement created the largest coalition in Israeli history. By adding Kadima to the government he was able to add Mofaz to the cabinet, winning another "yes" vote on a pre-emptive strike on Iran and at the same time exposing divisions within Kadima itself.

The coalition failed to hold, as Bibi could not deliver what he had promised Mofaz: a new law requiring near universal army conscription, including certain Orthodox Jews previously exempted. Collapsing after just 10 weeks, the deal failed to strengthen Bibi's war vote, but it may well have worked as a political move. Mofaz lost credibility following this debacle and Kadima appeared divided: not a positive state of affairs for an opposition ahead of early elections.

5. Bibi is hedging his bets by pushing for elections now, given the very likely return of Ehud Olmert, former prime minister and head of Kadima, to the political scene. Olmert, who was forced to retire in 2008 after facing corruption charges and a loss of public support following the 2006 war in Lebanon, is expected to make a return to public service.

Pundits believe that part of Bibi’s rationale for the early elections is a fear that if Olmert has enough time to get organised, he'll return to the political stage and could become one of the only contenders able to challenge Bibi for his job. While a recent opinion poll found that only 16% of voters would consider backing Olmert, there is much talk of his possible candidacy and a coalition with former opposition leader Tzipi Livni, former vice prime minister Haim Ramon and possibly Mofaz.

6. A separate, more administrative reason relates to timing. Both the upcoming municipal elections and the general elections were to fall on the same date in November 2013. Likud, Bibi's political party, lacks the resources to run both local and general campaigns at the same time. Moreover, municipal campaigns in Israel tend to focus more on social issues, which tend to bring out voters in favor of the centre-left parties (read: not Likud). In ensuring that the security issues like Iran remain the focus of an early election, Bibi is trying to bolster votes for his more militant party.

7. In moving the elections up, Bibi is also carving out a five-year term for himself – should he, as seems likely, win. By law, elections must be scheduled for the third Tuesday of the second Jewish month (which falls in the end of October or beginning of November) at least four years after the previous elections.

What does it all mean?

Bibi’s warpath towards striking Iran and refusal to actually work towards a fair two-state solution in the Israeli-Palestinan conflict will have grave consequences for the rest of the world. Another term for Netanyahu will also endanger the social programmes most Israelis want and need to offset the high cost of living.

Early elections or not, the fact remains that without new campaigns to get out the vote among moderates and progressives, Bibi has a great chance to win the election. That means that the best opportunity to protect social justice within Israel and to promote genuine regional security will come from a revitalisation of the social movement that swept across the country last year – and the recognition that popular hope and discontent can be converted into electoral victory.

Sources: Huffington Post, New York Times, BBC, Haaretz, Economist, Guardian, Atlantic, Financial Times, Avaaz, New York Times, Reuters, Jerusalem Post