After Huge Protests, Netanyahu Expected To Retreat On Israeli 'Judicial Reform'

By Maayan Lubell

JERUSALEM (Reuters) -Israeli Prime Minister Benjamin Netanyahu is set to halt his bitterly contested judicial overhaul, an official from his Likud party said on Monday, a day after the sacking of his defense chief over the plan sparked mass street protests.

Israel's Channel 12 TV reported Netanyahu would announce a halt to the overhaul at 10:30 a.m. (0730 GMT).

Earlier, President Isaac Herzog urged the government to call a halt to the planned legislation, which has ignited some of the biggest nationwide demonstrations in Israel's history.

"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," Herzog said on Twitter.

The warning from the head of state, who is supposed to stand above politics and whose function is largely ceremonial, underlined the alarm the divisions opened up by the proposals has caused. It followed a dramatic night of protests in cities across Israel, with tens of thousands flooding streets following Netanyahu's announcement that he had dismissed Defense Minister Yoav Gallant.

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.

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 part of the bill to go forward for ratification.

"The law is balanced and good for Israel," Rothman said as the bill passed the committee stage.

Three months after it took power as one of the most right-wing governments in the country's history, Gallant's removal has plunged Netanyahu's national-religious coalition into crisis, during a deepening security emergency in the occupied West Bank.

In a sign of the tensions within the coalition, National Security Minister Itamar Ben-Gvir, who heads one of the hardline pro-settler parties in the coalition, called for the overhaul to go ahead.

"We must not stop the judiciary reform and must not surrender to anarchy," he tweeted.

As trading opened on Monday, the shekel, which has seen big swings over recent weeks as the political turbulence has played out, fell 0.7 percent in early trading before recovering some ground as expectations grew the legislation would be halted.

The judicial overhaul, which would give the executive control over appointing judges to the Supreme Court and allow the government to over-ride court rulings on the basis of a simple parliamentary majority has drawn mass protests for weeks.

While the Netanyahu government has said the overhaul is needed to rein in activist judges and set a proper balance between the elected officials 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 and a central part of the overhaul package, a bill that would tighten political control over judicial appointments, is due to be voted on in parliament this week.

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.

(Additional reporting by Ari Rabinovitch and Henriette Chacar, writing by James Mackenzie; Editing by Edmund Klamann and Raju Gopalakrishnan)