After the government fell, Israeli President Haim Herzog chose Peres to form the new government. Peres soon found this task difficult. Speaking in a rally at the Yad Eliyahu Arena, Rabbi Elazar Shach, Degel HaTorah's spiritual leader, called on his public not to tolerate a coalition with the faithless, Kashrut-violating left, "eaters of hares and swine". This later became known as "The hares address". Following Shach's firm objection, Shas mentor Rabbi Ovadia Yosef also refused to allow its party members to join a Peres government. Peres then had only 60 MKs, one less than necessary. The extra MK would be Avraham Sharir, who had left the Likud in February to form the New Liberal Party.
The new government was to be approved on April 11. However, on that morning two Agudat Yisrael MKs, Eliezer Mizrahi and Avraham Verdinger, were absent, due to Rabbi Menachem Mendel Schneerson's ruling not to support any concession of an Israeli territory. It later turned out that Mizrahi was not even present at the signing of the agreement between the Alignment and Agudat Yisrael, while Verdinger only pretended to sign it, in fact just waving his pen over the paper.
Peres asked the President for an extension, but had to surrender his mandate on April 26. Shamir was given the mandate, and managed to form a right-wing coalition. Sharir returned to the Likud following Shamir's memorable cry "Abrasha, come back home!", and Efraim Gur, who left the Alignment, also joined. Shamir presented his new government on June 11.
During the affair, potential coalition members publicly demanded inducements, including a $2.5 million bank bond, $111 million in subsidies for private religious schools, and guaranteed seats in the Knesset. This prompted protests by the Israeli public, including rallies and hunger strikes. It was in one of the rallies in Israel Kings' Square that the call "Mush'hatim, Nim'astem!" ("Fed up with the corrupt!") was first uttered. It was later adopted by the Labor Party in its 1992 elections campaign (when it was led by Rabin), and is considered to have been instrumental to its victory.
The affair also led to an electoral reform and a direct elections format.