The short answer, is I'm not certain; but lets try to parse out the past few days.
First of all, lets keep in mind, Israel is starting a potential third wave of Covid. Secondly, these events have nothing to do with the alien story out of Israel. Remember that right here in Canada we have had our own alien stories.
Instead, it is a disagreement within the ruling coalition that seems to have pushed Israel to the brink of a new election. This has resulted in a new party being formed.
Lets look at what this means. First, the poll average:
27 - Likud (Bibi) [Right]
17 - New Hope (new party) [Right]
16 - Yamina (Bennett) [Right]
14 - Yesh Atid (Lapid) [Left]
11 - Joint List (Arab) [Left]
9 - Shas (Orthodox) [Right]
7 - UTJ (Orthodox) [Right]
7 - Yisrael Beitenu (Lieberman) [Centre?]
6 - Meretz (Progressive) [Left]
6 - Blue and White (Gantz) [Centre Left]
This is a major swing from just a week ago, with the new party taking seats from almost every source. Yamina and Likud are both down by roughly 5 seats, while Yesh Atid and Blue and White are both down by roughly 3 seats. Lets look at why this could potentially cause chaos.
Saar, leader of New Hope, says he will not sit in government with Bibi or with Lapid. Therefore the most logical government for him is one of New Hope, Yamina, and the two Orthodox parties. This is only 49 seats. Short of the 61 needed in Israel. He would thus need to find 11 additional seats. If he thinks Yesh Atid is too far left, Meretz and Joint List are off the table for him. He could get Gantz to join, but Lieberman has refused in the past to sit with Orthodox parties; this means Saar can not get a majority (unless somebody changes their mind about who they are willing to sit with, or, elected members defect from their parties; things that are unlikely, but, have happened before in Israel)
Bennett has similar reservations to Saar but may be more willing to bend. Even then, Likud+Yamina+Haredi (IE the Orthodox parties) only get to 59, and would need an additional partner at the coalition table.
Bibi would likely be happiest with a right-wing coalition. This would reach 76 seats, easily a majority, however, both Saar and Bennett have strong issues with him personally, and such a coalition is likely impossible.
A left coalition is also seemingly impossible. Even if Lapid could somehow convince Bennett and the Orthodox parties, we reach 58 before we run out of parties.
Gantz, somehow, ends up with the better math, despite being "last place" in the poll. Bennett and Saar might be willing to work with him; combined with his own party, this is 39 seats. If he could bring Yisrael Beitenu, and Meretz on board, difficult but potentially doable, he'd only need Yesh Atid to get a majority. The big problem here is he stabbed Lapid in the back pretty hard at the end of the previous election, and Lapid would need some strong promises - the sort that Gantz likely could not provide (as he would need to provide any goodies needed to win Lapid over to Bennett and Saar instead)
The end result is more chaos, and likely, yet another election.
There is, however unlikely, another option. Perhaps just as chaotic, but, one that could, at least for a time, get a majority. Bibi somehow resigns. If that happens, all of a sudden, a Likud-Gantz-Bennett-Saar coalition looks very likely. All 3 men would desperately love to lead Likud, and, therefore, the right-wing in Israel. These 4 parties have 66 seats. The two problems with this are that Bibi would never willingly step aside, and, Gantz, Bennett, and Saar, would likely tear any coalition apart from the inside with their own infighting.
As such, the answer to "What is going on in Israel" is "I have no idea"