Reports have it that the prime minister, Benjamin Netanyahu, wants to bring Yesh Atid, led by Yair Lapid, into the coalition. To that end, Netanyahu has asked his coalition members for their approval. UTJ has refused to agree. According to Yaakov Litzman, Lapid is a red line for them because of the damage he tried to do intentionally and specifically to the Haredim.
source: INN, Behadrei and Jewish press

I wonder what positions Netanyahu would have been able to give Yesh Atid in return for their entry into the government. Bringing in another party would require a reshuffle of government positions, with 2-3 ministries going to Yesh Atid along with other positions. I cannot imagine the Haredi parties being willing to give anything up so that Yesh Atid could get them, and no party would agree to a reshuffle that was not proportionately divided among all the parties. I also imagine Yesh Atid would not agree to join the government for new ministries that would be created for them, as the number of ministries and deputy ministers was a big issue for them.

I don't know if Litzman's intransigence on Yesh Atid joining the government is right or wrong. I know Litzman considers Yesh Atid to be supremely evil, far more so and more vociferously than any of the other members of UTJ and Shas.

On the one hand, the hand that Litzman holds, they are evil, they tried to harm us, we cannot partner with them.

On the other hand, and I am surprised that Litzman does not even consider this, bringing Yesh Atid into the government would obviously mean that yesh Atid has to accept the government's basic positions and guidelines (like any member of the coalition does). This would be the opportunity tp have Yesh Atid, if YA would actually join, go against everything they have stood for in the past - they would be supporting a government that raised child allowances, gave money back to yeshivot wherever YA took it away, has a larger government, repealed the draft law, repealed the changes Yael Gherman had made when she was Minister of Health, and more. Taking Lapid in would really be sticking it in his face.

I don't know which is better. I do have a hard time believing that such an arrangement would have actually worked out. I don't see how Lapid could have justified and rationalized joining the government.