Netanyahu's meeting on Sunday with Finance Minister Moshe Kahlon, a key coalition partner who has also pushed for early elections, was seen as a last attempt to prevent the collapse of the coalition - which now has a one-seat majority in parliament - but ended with no conclusion.
Netanyahu's decision to appoint himself interim defense minister represents a response to cabinet member Naftali Bennett's demand that he be installed in the position, contradicting earlier reports on Sunday by Israel's Channel 13 that Netanyahu was prepared to give the Jewish Home Party chairman the position.
Netanyahu's crisis further deepened after the Palestinian resistance movement Hamas, which rules the Tel Aviv-blockaded territory of the Gaza Strip, started to return the Israeli military's back-to-back incursions with rocket fires against the city of Ashkelon in southern Israel.
The Defense Minister didn't go alone, but took his whole Yisrael Beitenu party with him, which left the coalition with just a single seat majority in the Israeli parliament.
Israel's government appears to have survived a possible collapse after a key partner withdrew a threat to leave the coalition and force snap elections.
Netanyahu is trying to convince them to stay, and his Likud allies are already preparing to pin the blame on them if that effort fails.
Gareth Thomas: 'I have been the victim of a hate crime'
In a statement, South Wales Police said a 16-year-old boy apologised after Mr Thomas made a complaint regarding the hate crime. His video was met with hundreds of messages from people supporting. "So this I hope will be a positive message".
Education Minister Naftali Bennett, of the pro-settler Jewish Home party, has already threatened to bring down the government if he is not appointed defence minister.
Channel 2 reported Sunday night the two were set to resign, though neither Bennett's nor Shaked's office has issued any statements publicly, short of an announcement of the press conference.
Meanwhile, Finance Minister Moshe Kahlon, another senior partner, said another year of such instability will harm the economy. "We remember well what happened when elements inside the coalitions took down Likud governments in 1992 and in 1999", he said, noting the past two elections in which the Labor Party came to power. They agreed to meet again next week, with Kahlon telling Israel Television News Company that the PM would need to "pull a rabbit from a hat" to keep the government running.
Netanyahu met with Kahlon on Sunday in order to find a solution to the deadlock, but the talks brought no results.
A poll published after the ceasefire found 74 percent of respondents were unhappy with Netanyahu's handling of the escalation with Gaza and its Islamist rulers Hamas, though it also showed his party would still easily win the most seats.
Elections are not supposed to be held until the end of the current government term in November 2019. The country has always been eagerly awaiting the attorney general's decision on whether to press charges.