AP Interview: After rough first term, new-look Lapid mounts come-back in Israeli election race

A few weeks ago, Yair Lapid appeared destined to become a one-hit wonder in Israeli politics, as his centrist party sank in the polls ahead of the March 17 parliamentary elections. Bruised by a rough term as finance minister, the former TV anchorman and one-time boxer is now mounting a furious late-round comeback with a message linking prosperity with regional peace.

It seems to be working: he is again surging in the polls, much as during the previous campaign in 2013, positioning the man who once boasted he would be Israel's next prime minister — a faux pas he now regrets — to remain a significant force.

"If you ask me — 'What is the one great move you can make to improve the Israeli economy?' — of course it will be signing an agreement with the Arab world about the Israeli-Palestinian conflict. This will change everything," Lapid told The Associated Press during an interview in his Tel Aviv office.

The popular 51-year-old — who has at times been an author, actor, columnist and bank pitchman as well — can now claim some understanding of the economy expert after his crash course as finance minister.

Known for his wide grin and perennial black attire, Lapid led his Yesh Atid party to a surprising performance two years ago, finishing as the as the second-largest party in a fragmented parliament with a message promising relief for Israel's beleaguered middle class.

Prime Minister Benjamin Netanyahu handed Lapid the finance post — an often thankless job that has derailed many promising political careers in the past.

Inheriting a large deficit, he was forced to preside over unpopular spending cuts and take on the powerful military lobby. Meanwhile, some of his key pledges — to lower the cost of living and bring down soaring housing prices — failed to materialize. His sparkle faded.

After Netanyahu fired him in December for alleged insubordination and the government crumbled, prompting the call for the early vote, Lapid found himself struggling to remain relevant.

A chagrined Lapid said he learned some bitter lessons from his term in office.

"There was some arrogance in the first three or four months I guess that we could do without, and we have learned a whole lesson in modesty," he said. He says the boastful prediction that he would be the next prime minister was one of his "less elegant moments."

Yet the finance post provided valuable insight into the inner workings of government and enabled him to chalk up some key accomplishments, Lapid said.

He led an effort to end some draft exemptions for ultra-Orthodox men — a sore point with Israel's secular majority — and increased government stipends for Holocaust survivors. He also saved millions of dollars by reducing the number of government ministries.

While refusing to reveal what role he hopes to play in the next government, Lapid said he would gladly return to the finance post.

He also refused to take sides openly in the race for prime minister between Netanyahu of the nationalist Likud Party, who has focused his campaign on the Iranian nuclear program and regional security threats, and Isaac Herzog of the dovish Labor Party, who is focused on economic and cost-of-living issues.

Lapid said he has good relationships with both, and insisted he could work with Netanyahu again, despite the December blowup.

Although he is almost universally considered to be part of the "center-left" anchored by Herzog, he has fairly successfully sought to position himself as a centrist voice that could deliver the needed support to either side to secure a parliamentary majority. Another middle-of-the-road party, led by former Likud Cabinet minister Moshe Kahlon, he dismisses as a "Likud satellite."

"We are the centrist party and I think the days of this split between right and left in Israel ... are long gone," he said.

On the campaign trail, however, he has said that Netanyahu should no longer be prime minister. He also has taken on one of Netanyahu's key constituencies, the West Bank settler movement, saying the government should stop wasting "billions" on isolated communities it will never keep under any peace deal.

Lapid's said the economy and Israel's diplomatic position are intimately linked.

"Without a strong economy, we won't be able to pay the bills for our security," he said. "It is interlinked."

Lapid says Israel should aggressively pursue a peace agreement with the Palestinians as part of a broader deal with the wider Arab world. He says that even the "most moderate" estimates predict Israel's standard of living — already on par with many countries in the European Union — could reach American levels if peace is reached.

Israel has seen several centrist parties come and go, including the secular Shinui Party headed by Lapid's father, the late Joseph Lapid, a decade ago. Lapid's hopes to be the exception rest largely on an effusive brand of charm and a fairly strong lineup of candidates on his parliamentary list that includes a former head of the Shin Bet security service, a leading TV sports pundit and an assortment of popular figures including a moderate rabbi and an Ethiopian immigrant.

After polls initially predicted Lapid would sink to as few as nine seats in parliament from the current 19, his Yesh Atid is rebounding. Recent surveys say he could capture 13 or more seats, which would make him one of the largest factions in a fragmented parliament.