TEL AVIV—Israel’s Prime Minister Benjamin Netanyahu and his rival Benny Gantz are struggling to agree on terms for a unity government, leaving the country in political limbo and raising the specter of another do-over general election, as the nation grapples with a coronavirus lockdown.
Messrs. Netanyahu and Gantz agreed in principle to form a unity government led initially by the incumbent after the March vote—the third in just under a year—left no clear winner. But the parties’ talks to complete the deal before the Israeli…