A relative political unknown has swept to a shock victory to become head of Israel’s opposition Labour party and one of the main candidates to challenge the long serving rightwing prime minister, Benjamin Netanyahu, in future elections.

The emergence of Avi Gabbay, 50, a nonchalant businessman who burst onto Israel’s political scene, immediately drew comparisons to the French president, Emmanuel Macron, from some commentators, while others suggested it was the latest chapter in the once dominant party’s long decline.

Gabbay was elected leader on Monday night after two rounds of voting in which he defeated first the party’s incumbent head and official opposition leader, Isaac Herzog, and then former leader and favourite Amir Peretz, who had the backing of Israel’s main trade union body.

A self-made millionaire and former head of the Israeli telecoms company Bezeq, Gabbay is a Mizrahi – or eastern Jew – the child of Moroccan Jewish immigrants who grew up in a transit camp, overturning the long dominance in the Labour party of Ashkenazi Jews who resettled from Europe.

Gabbay will serve as the party’s head and candidate for prime minister but cannot be leader of the opposition as he is not a member of parliament.

His election comes amid dismal recent polling for the party that dominated Israel in its first decades of statehood, but has been largely eclipsed as the country’s electorate moved right under Netanyahu.

The high turnout surprised many, with commentators wondering whether Labour’s desire for a fresh face might be reflected more widely in an Israeli society that has become jaded by the scandals and moribund politics surrounding Netanyahu.

Gabbay has no high-level security experience, usually regarded as a prerequisite for high office in Israel. He has also flipped between membership of the centre-right Kulanu party and serving briefly – if almost invisibly – as an environment protection minister in Netanyahu’s coalition, before quitting and joining Labour.

However in his campaign, Gabbay managed to secure the support of former Labour leader and the party’s last prime minister Ehud Barak who hailed his victory as a “revolution” on his Facebook page, adding that Netanyahu would be “sweating tonight, with good reason”.

The question now is whether Gabbay can attract the support of working-class Mizrahi voters who Netanyahu and his Likud party have long counted on to stay in office.

Mizrahi Jews, many of whom arrived in Israel in 1950s, believe they were treated as second-class citizens by the Ashkenazi elite that dominated Labour, prompting them to vote Likud or other rightwing parties, even when Amir Peretz – also a Mizrahi – led Labour.

Although Gabbay and his often young supporters have presented his victory as a “revolution”, Gabbay’s policies appear less mould-breaking, favouring a resumption of talks with the Palestinians and halting construction outside the main Jewish settlement blocs.

Gabbay, however, is opposed to unilateral withdrawal from the occupied Palestinian territories, while his position on religions in schools and shabbat observance is equally middle of the road in an Israel that has become more right wing and observant.

Commenting on his win in Yedioth Ahornoth, veteran columnist Nahum Barnea said Israeli politics had “never known a victory such as this one” by an individual “unknown to most of the public just a few months ago.”

However, Ben Caspit, writing in Maariv, was more cautious: “Should Benjamin Netanyahu and Yair Lapid be concerned? It is too soon to tell. Bibi has no real cause for concern.

“If Gabbay thinks that he will sweep Likud voters with talk about social democracy,” he is wrong. “If he believes that daydreams about ‘peace’ will bring the voters home, the same is true. Someone has to let him know that the people of Israel have taken a sharp right turn.”