The US administration of US President Joe Biden welcomed the decision of Israeli Prime Minister Benjamin Netanyahu to delay action on the judicial overhaul.
White House spokeswoman Karine Jean-Pierre said the Israeli decision is the best path for Israel and all its citizens to find this compromise.
In recent weeks, Netanyahu's conservative government has attempted to push through reforms to the judiciary that would effectively allow the government to choose judges of the country's top court.
After coming under much street pressure and international criticism, the PM decided to halt the reform and called for compromise talks with the center-left opposition.
A spokesman for the US State Department, Vedant Patel, said the move was "an opportunity to create additional time and space for compromise," adding, "we continue to strongly urge Israeli leaders to find a compromise as soon as possible."
Patel noted that "democratic societies are strengthened by checks and balances, and fundamental changes to a democratic system should be pursued with the broadest base of popular support."
In response to the accusations that Washington somehow funded the protests against Netanyahu's government, the spokesman asserted that these claims are "completely and demonstrably false."
"The Movement of Quality Government is an NGO, and it received a modest grant from the State Department initiated during the previous administration."
He explained that the latest disbursal of funds came in September of 2022, before the most recent Israeli elections, indicating that "the department supports a wide range of programming by civil society actors around the world on strengthening awareness for human rights and democratic values."
The cautious statements reflect the Biden administration's aim to maintain communication with Netanyahu amid efforts by US officials to calm the tensions and violence between Israel and the Palestinians.
CIA Director William Burns recently warned that a third intifada could break out.
National Security Minister Itamar Ben-Gvir and Finance Minister Bezalel Smotrich are pushing hard to approve the judicial overhaul and maintain settlements in the Palestinian territories.
Last week, US Secretary of State Antony Blinken noted that some measures make it "hard or maybe futile" for the United States to mediate between Israel and the Palestinian Authority (PA).
Blinken said: "I can say that both the Israeli government and the Palestinian Authority want us to be involved and engaged in helping and supporting and working with them to try to get to this period of calm."
He added: "At some point if either or both sides are not doing what we believe is necessary to get there, it will be hard or maybe futile for us to do that."
The right-wing Israeli government recently introduced legislation that would pave the way for the re-establishment of settlements in the occupied West Bank nearly 20 years after their disbandment.
A group of 92 US lawmakers sent a letter to Biden urging him to clarify that the US opposes any Israeli attempts to annex lands in the West Bank.
"Stripping the judiciary of its check on the governing coalition would empower far-right lawmakers seeking to entrench settlement of the West Bank and advance a pro-annexation agenda, undermining the prospects for a two-state solution and threatening Israel's existence as a Jewish and democratic state," the lawmakers wrote.
