Israel is facing fresh political turmoil after Kadima – the largest party in the country's Parliament – quit the coalition government of Prime Minister Benyamin Netanyahu.
Kadima abandoned the coalition a mere two months after joining following a disagreement over the drafting of ultra-orthodox Jews into the army.
Kadima, the largest party in the Knesset with 28 of its 120 seats, had joined the government in May with the declared aim of ending a decades-old blanket exemption of Jewish seminary students from military service.
In the early days of Israel’s existence, then-Prime Minister David Ben-Gurion agreed to exempt about 400 pious students from military service so they could devote themselves to a lifetime of studying Jewish scriptures.
Now that number has swollen to about 60,000 men, all of whom are supported by state handouts, intermittent work or donations from family and friends.
Meanwhile, secular men and women in Israel are required to perform a two to three-year stint in the military stint upon turning 18 years old.
The pressure from the secular majority has therefore mounted for a more equal sharing of the military burden.
The Supreme Court ruled in February that a temporary law that codified the exemptions was unconstitutional and set an August 1 deadline for its expiry.
The sides, however, were unable to forge a compromise.
"We made a real effort to push toward a new law that would change the balance of service," Kadima leader Shaul Mofaz told at a news conference on Tuesday.
Mofaz said he tried to forge a "new social contract," but was presented with "red lines" that could not be crossed.
"We are going back with our heads held high to lead the nation in the opposition," he declared.
In a letter to Mofaz, Netanyahu expressed regret over his decision.
"I am sorry that you decided to give up the opportunity to bring about a historic change. After 64 years we were very close to a significant change in spreading the burden (of army service)," he said. "I will continue to work to bring a responsible solution that Israeli society expects."
Netanyahu had sought a system that would gradually draft growing numbers of ultra-Orthodox over several years, and continue the exemptions for a smaller number of them.
Mofaz wanted fewer exemptions and for the ultra-religious to be incorporated much faster. The talks were complicated by calls for Israel's Arab minority, who are exempt from the draft, to be forced into civilian national service.
Kadima's addition gave Netanyahu a majority of 94 seats in the 120-member parliament, raising hopes that they would not only resolve the draft issue but also make progress on peace matters with the Palestinians.
Mofaz, a political moderate, favors broad concessions to the Palestinians and has proposed the formation of an interim Palestinian state while its final borders are being negotiated.
With Mofaz's departure, Netanyahu appears to retain control of a majority in parliament.
But, as RT’s Paula Slier reports from Tel Aviv, the break-up is widely seen in Israel as a serious political blow to Netanyahu and more broadly, the Mideast peace process.
It no longer allows Netanyahu to claim that he presides over a government of national unity.
It makes him much weaker both domestically and internationally, as it comes at a time when Israel is trying to deal with its worsening public image in light of a number of issues: social protests, unstable neighbors and internal political upheaval.