Prime Minister Binyamin Netanyahu confirmed on Wednesday that his main spokesman, Yoaz Hendel, had resigned after the Eshel affair.

“Netanyahu thanked Hendel for his great contribution to Israeli public diplomacy in Israel and the world,” a statement from the PMO said, adding the new communications director will be Liran Dan.

News of Hendel’s resignation came on the heels of Netanyahu bureau chief Natan Eshel agreeing to step down in a plea agreement pursuant to allegations of harassment against him.

The woman Eshel was accused of harassing – known only as R – refused to file charges, cooperate with investigators, or testify against him.

Handel, journalist and researcher who wrote regular columns for several Hebrew newspapers including Maariv and Makor Rishon, cabinet secretary Zvi Hauser, and military secretary Yohanan Locker reportedly filed the complaint with the attorney general without informing Netanyahu of their plans.

Some observers have likened the complaint to an internal putsch intended to force Netanyahu into restructuring his bureau at a critical time.

According to reports in Israel’s Hebrew-language press, Netanyahu told the trio he had “lost confidence” in them over the incident. Handel tendered his resignation shortly thereafter. Hauser is expected to follow suit, while Locker is set for a pre-planned transfer to new military duties.

On Wednesday, Netanyahu told reporters, “The right thing to do in any system in the case of a concern over harassment is to immediately take it to the responsible authorities and to deal with it. That is precisely what I would have done in this case.”

“What is wrong is that the head of the system – in this case the prime minister – does not know of such a central issue taking place in his own bureau for a month-and-a-half, and has to learn about it through the media,” he said.

Netanyahu said the affair created “a difficult, painful and uncomfortable situation” in his office.

The upheaval in the PMO’s office comes at a time when Netanyahu has numerous issues of national consequence to address.

Netanyahu and Defense Minister Ehud Barak are said to be mulling a strike on Iran’s nuclear program, a ground incursion in Hamas-run Gaza, and the possibility Syria’s unrest could spill over Israel’s northern border.

In addition, a senior Egyptian official this week reported that Cairo and Jerusalem could be at war within three-months as Islamist parties prove to be the regional victors in the Arab Spring.