In a surprise move, Israeli prime minister Benjamin Netanyahu last week forced out his long-serving defense minister, Moshe Yaalon. As he stepped down, Yaalon warned: “Extremist and dangerous elements have taken over Israel.”

He was referring partly to his expected successor: Avigdor Lieberman, leader of the far-right Yisrael Beiteinu party, whose trademark outbursts have included demands to bomb Egypt and behead disloyal Palestinian citizens.

But Yaalon was also condemning extremism closer to home, in Netanyahu’s Likud party. Yaalon is to take a break from politics. With fitting irony, his slot is to be filled on Likud’s backbenches by Yehuda Glick, a settler whose struggle to destroy Jerusalem’s al-Aqsa mosque and replace it with a Jewish temple has the potential to set the Middle East on fire.

Israeli commentators pointed out that, with Lieberman’s inclusion, the government will be the most extreme in Israel’s history – again.

French prime minister Manuel Valls, who began a visit to the region on Saturday, is likely to face an impregnable wall of government hostility as he tries to drum up interest in a French peace plan.

Less noticed has been the gradual and parallel takeover of Israel’s security institutions by those espousing the ideology of the settlers – known in Israel as the national-religious camp.

None of this is accidental. For two decades the settlers have been targeting Israel’s key institutions. Under Netanyahu’s seven-year watch as prime minister, the process has accelerated.

Naftali Bennett, leader of the settler party Jewish Home and education minister, recently boasted that the national-religious camp, though only a tenth of the population, held “leadership positions in all realms in Israel”.

One such success for Bennett is Roni Alsheikh who was appointed police chief late last year. He was a long-time resident of Kiryat Arba, one of the most violent settlements in the occupied territories.

The force’s most recent campaign, “Believing in the police”, is designed to recruit more religious hardliners. Behind the program are settler-politicians who have called Palestinians “sub-human” and expressed sympathy for those who burnt to death a Palestinian family, including a baby, last summer.

The other security agencies are being transformed too. Religious nationalists now hold many of the top posts in the Shin Bet intelligence service and the Mossad, Israel’s spy agency.

In the army too, the settlers are today heavily over-represented in the officers corps and combat units. For more than a decade their rabbis have dominated the army’s education corps, invoking God’s will on the battlefield.

But, despite these rising tidewaters, Israel’s traditional secular elite – mostly of European extraction – have desperately clung on to the top rungs of the army command.

Netanyahu bitterly resents their continuing control. They stood in his way at two momentous occasions, as he tried to overturn the Oslo accords in the late 1990s and to bomb Iran five years ago.

In a bid to curb their influence, Netanyahu tried to promote the religious Yair Naveh as military chief last year, but was blocked by the top brass.

Lieberman’s arrival as defense minister, however, may mark a turning point.

In some ways, less is at stake than Yaalon’s hyperbolic warning suggests. For decades the secular generals have been in charge of an occupation that has crushed the rights of Palestinians and caged them into ever-smaller holding pens. These generals have been just as cruel as the religious officers replacing them.

Nonetheless, the reverberations of this quiet revolution should not be ignored.

The old elites have lived off the fat of the land in the kibbutz, Israel’s spacious farming communities built on the ruins of hundreds of Palestinian villages ethnically cleansed in 1948.

After the 1967 war, the kibbutz-generals happily exported the same model of industrial-scale theft of Palestinian land to the occupied territories.

But their security obsessions were ultimately rooted in Israel, where they fear having to account for the crimes of 1948 from which they profited. Their abiding nightmare is a right of return to Israel of the lands’ original owners – Palestinian refugees today numbering in the millions.

The religious camp’s priorities are different. The lands they defend most passionately are not in Israel but in the West Bank and East Jerusalem. That is where many live and where the holy places that sanctify their territorial greed are located.

The spread of this zealotry into the army has deeply discomfited its more liberal elements. In recent years, small numbers of whistleblowers have emerged, from military intelligence unit 8200 through to a group called Breaking the Silence.

The recent video of an execution of a badly wounded Palestinian by army medic Elor Azaria – and the outpouring of public support in Israel for him – has only intensified these tensions. This month the army’s deputy head, Yair Golan, compared Israel to Nazi Germany in the 1930s. Lieberman, meanwhile, is Azaria’s most vocal supporter.

The goal of the religious nationalists is undisguised: to remove the last restraints on the occupation, and build a glorious, divinely ordained Greater Israel over an obliterated Palestinian society.

That means no hope of a peaceful resolution of Israel’s conflict with the Palestinians – unless it is preceded by a tumultuous civil war between Israel’s secular and its religious Jews.

A version of this article first appeared in the National, Abu Dhabi