Gabbay won 52% of the vote in a runoff election against Amir Peretz, a Labor Party veteran and a former party chairman, who received 47%. Gabbay will replace outgoing Labor chairman, Isaac Herzog, who placed third in the first round of primary voting on July 4.
In his victory speech, Gabbay promised “leadership that will act with courage and integrity toward peace with our neighbors’’ and to work toward replacing Netanyahu’s
"This is the beginning of a path. That path leads to the changing of the government in Israel," he said. "The Labor Party voted for change."
Though Labor currently leads the opposition bloc in the Israeli parliament, the Knesset, the party is struggling with an electorate that has shifted to the right in recent years, and a seeming lack of a charismatic political leader to reinvigorate the party base and attract new supporters.
While Labor's forebears established the country after its founding and reached peace treaties with Israel's neighbors, it's been nearly two decades since the party won a general election. Herzog finished second in the 2015 elections, but his popularity collapsed after it was revealed that he secretly negotiated to join Netanyahu's coalition.
Polls in recent months suggested that the party would lose about half the parliamentary seats it won in 2015.
Gabbay, 50, a relative unknown who headed Israel's largest phone company, entered politics three years ago with a center-right party and briefly served as an environment minister under Netanyahu before resigning and joining the Labor Party last year.
The new Labor chairman has never been elected to the Israeli parliament and doesn't carry the political baggage of more veteran lawmakers, some observers said. Because he is not a lawmaker, Gabbay won't be able to serve as the opposition chairman in the parliament and will need to find an ally in the party to fill the position.
Gabbay, the son of Moroccan immigrants, has the potential to boost the party's appeal among Israel's Middle Eastern Jewish population, a voting bloc that traditionally has preferred Netanyahu's Likud Party and shunned Labor as a party of secular European elites.
"The people don't know him, but he has managed to sell himself as a new commodity and that's the key thing,'' said Ofer Zalzberg, an Israel analyst at the International Crisis Group.
But Gabbay lacks any experience in diplomatic or national security roles, leaving a stark contrast with Netanyahu, who has been known in Israel as "Mr. Security," Zalzberg said. If a pair of corruption investigations of Netanyahu result in an indictment, however, Gabbay's prospects might improve.
Though Israeli politics have become increasingly dominated by socioeconomic debates and complaints about the rising cost of living, political analysts say that when Israelis cast their ballots they most often vote for the candidate who is seen as a security hawk.
"In order to lead, you need to cross the security threshold in the eyes of the public," said Jonathan Rynhold, a political science professor at Bar Ilan University. "Gabbay has no [security] record."
At a Labor polling station in Tel Aviv, party members said that, even though Gabbay is a newcomer to the party, he represents a change for Labor compared with Peretz, who is viewed as part of Labor's old-guard political machine.
Doron Braunshtein, a 41-year-old Labor member, bemoaned that neither of the candidates had the "star" power to rival Netanyahu, but said that Gabbay at least represents "someone new."
Mitnick is a special correspondent.