Israel plunged toward a political crisis after Kadima, the largest party in the government coalition, pulled out last night.
The Kadima party voted to withdraw from the government in a feud over attempts to reform the country’s military conscription.
Even if Prime Minister Benjamin Netanyahu manages to hold the truncated coalition together, the sudden crisis has broader implications for peace, leaving him in charge of a narrow parliamentary majority dominated by religious and nationalist hard-liners who oppose concessions to the Palestinians.
Kadima leader Shaul Mofaz brought the party into the coalition to work with Mr Netanyahu on ending a contentious system that has granted national service exemptions to tens of thousands of ultra-Orthodox Jews.
But the sides were unable to reach a compromise.
Mr Mofaz said he had tried to forge a “new social contract” but was presented with “red lines” that couldn’t be crossed.
“We are going back with our heads held high to lead the nation in the opposition,” he declared.
Netanyahu’s government, which was torn between religious and secular parties, was on the brink of collapse over the issue when Mr Mofaz was lured into the government in May.
He favours some concessions to the Palestinians and has proposed formation of an interim Palestinian state while final borders are negotiated.
But with Mofaz’s departure Netanyahu appears unlikely to float any bold proposals toward the Palestinians.
Palestinian government spokesman Ghassan Khatib refused to comment, calling the resignation an internal Israeli matter.