Israeli Prime Minister Benjamin Netanyahu's coalition plunged into chaos on Monday, after mass overnight protests over the sacking of his defense chief piled pressure on the government to halt its bitterly contested plans to overhaul the judiciary.
Netanyahu had been expected to make a televised statement on Monday morning announcing the plans, which he says are needed to restore balance to the system of government and which critics see as a threat to democracy, had been suspended.
Amid reports that his nationalist-religious coalition risked breaking apart, the statement was postponed while Netanyahu met heads of the parties.
Meanwhile, tens of thousands of protesters returned to the streets in Tel Aviv and Jerusalem, many waving the blue and white Israeli flags that have been become an emblem of the protests.
Earlier, a source in his Likud party and another source closely involved in the legislation said Netanyahu would suspend the overhaul, which has ignited some of the biggest street demonstrations in Israel's history and drew an intervention by the head of state.
"For the sake of the unity of the people of Israel, for the sake of responsibility, I call on you to stop the legislative process immediately," President Isaac Herzog said on Twitter.
The warning by Herzog, who is supposed to stand above politics and whose function is largely ceremonial, underlined the alarm caused by the proposals, which would tighten political control over judicial appointments and allow parliament to overrule the Supreme Court.
It followed a dramatic night of protests in cities across Israel, with hundreds of thousands flooding streets following Netanyahu's announcement that he had dismissed Defense Minister Yoav Gallant for opposing the plans.
A day earlier, Gallant had made a televised appeal for the government to halt its flagship overhaul of the judicial system, warning that the deep split it had opened up in Israeli society was affecting the military and threatening national security.
With the army reinforcing units in the occupied West Bank after a year of unrelenting violence that has killed more than 250 Palestinian gunmen and civilians and more than 40 Israelis, the removal of the defense minister fed accusations that the government was sacrificing the national interest for its own.
No confidence motion defeated
During furious scenes in the Knesset early on Monday, opposition members of parliament attacked Simcha Rothman, the committee chairman who has shepherded the bill, with cries of "Shame! Shame!" and accusations comparing the bill to militant groups that want the destruction of Israel.
"This is a hostile takeover of the State of Israel. No need for Hamas, no need for Hezbollah," one lawmaker was heard saying to Rothman as the constitution committee approved a key bill to go forward for ratification.
"The law is balanced and good for Israel," Rothman said.
While the drama unfolded, Finance Minister Bezalel Smotrich presented the 2023-24 budget to parliament for a preliminary vote later in the day.
An opposition no confidence motion was defeated but in a sign of the tensions within the ruling coalition, National Security Minister Itamar Ben-Gvir, who heads one of the hardline pro-settler parties, called for the overhaul to go ahead.
"We must not stop the judiciary reform and must not surrender to anarchy," he tweeted.
General strike call
The shekel, which has seen big swings over recent weeks as the political turbulence has played out, fell 0.7% in early trading before recovering ground as expectations grew the legislation would be halted.
By late morning, shares in Tel Aviv were up around 2% and the shekel had risen around 0.8%.
As opposition spread, the head of the Histadrut labor union called for a general strike if the proposals were not halted.
Take-offs from Ben Gurion airport were suspended, while Israel's main seaports and hospitals and medical services were set to strike. Branches of McDonalds were also closed as the protests extended across the economy.
"Bring back the country's sanity. If you don't announce in a news conference today that you changed your mind, we will go on strike," Histadrut chairman, Arnon Bar-David said.
The judicial overhaul, which would give the executive control over naming judges to the Supreme Court and allow the government to override court rulings on the basis of a simple parliamentary majority, has drawn mass protests for weeks.
While the government says the overhaul is needed to rein in activist judges and set a proper balance between the elected government and the judiciary, opponents see it as an undermining of legal checks and balances and a threat to Israel's democracy.
Netanyahu, on trial on corruption charges that he denies, has so far vowed to continue with the project.
As well as drawing opposition from the business establishment, the project has caused alarm among Israel's allies. The United States said it was deeply concerned by Sunday's events and saw an urgent need for compromise, while repeating calls to safeguard democratic values.
