Israel's Knesset will hold a vote next week that could tip the scales against a drive by Prime Minister Benjamin Netanyahu's hard-right coalition to curb the Supreme Court, a move that set off one of the country's worst political crises in years.
Parliament on June 14 is set to elect two lawmakers to join a panel that will select judges, including to the Supreme Court, one of the few checks and balances in Israel's political system.
The make up of the nine-member panel of lawmakers, senior judges, ministers and lawyers has been at the heart of a battle over the nature of Israel's democracy, which began in January when the government announced a plan to overhaul the judiciary.
This touched off protests and Western powers voiced concern about what it meant for Israel's democratic health.
If one of the two lawmakers chosen is from the opposition - keeping the status quo - it would be a sign of compromise by Netanyahu after weeks of talks with his opponents and a setback for hardliners in his religious-nationalist government who want more control over judicial appointments.
It could affect the Supreme Court, which must replace the chief justice and another judge, in coming months.
"There are no guarantees with someone you don't trust," opposition head Yair Lapid told Army Radio, although he and other lawmakers have indicated over the past week that agreements on candidates for the panel have been reached.
But Netanyahu's Likud party has kept the opposition guessing, saying on Monday a decision would be made next week.
The possibility that an opposition lawmaker would be named to the panel has pushed the shekel up some 3% this week, with a 1.1% gain to a two-week high of 3.644 per dollar.
Critics denounce the judicial plan pushed by Netanyahu, who is on trial on graft charges that he denies. They say the move to let parliament override many Supreme Court decisions threatens the independence of the courts and endangers democracy.
The court acts as a check in Israel's political system which has few other balances, given it has just one chamber of parliament.
Washington wants consensus
Until now, Netanyahu's talks with the opposition to defuse the crisis have yielded little. He has also sent mixed messages about the overhaul's fate, compounding uncertainty that has hit the economy and the shekel.
The vote on the panel makeup could provide clarity for Israelis and Western allies, including Washington which has urged Netanyahu to reach a consensus over legal reforms.
If parliament adheres to a custom in the confidential vote by electing an opposition member, it would signal to opponents that Netanyahu was serious about a compromise and was ready to adjust his judicial plan.
Facing dissension from within his party, Netanyahu told Likud on May 29: "The reform is not dead, but we are making every effort in talks in order to reach broad agreements."
Likud Justice Minister Yariv Levin, a driving force behind the overhaul plan, says he and his allies want to give elected politicians more sway over what they see as a left-leaning and over-reaching Supreme Court.
Critics say it will politicize the judiciary.
Lawmaker Keti Shitrit, who is on the Likud team that is in negotiations with the opposition, said: "The reform will happen, just not in its original form."
The Prime Minister's Office Director-General Yossi Shelly played down questions about the judicial discussion. "I think that ultimately it will end positively," he told Kan radio.
