Exclusive: Biden says Bibi shouldn't rush "divisive" judicial overhaul bill amid threats

President Biden in a statement to Axios called on Israeli Prime Minister Benjamin Netanyahu not to move forward with the planned Israeli Knesset vote on a bill that is part of the government's judicial overhaul, saying he is highly concerned about the legislation and its potential implications.

The big picture: Thousands of Israeli reservists, including fighter pilots and members of the intelligence, cyber and special operations units in the IDF, have said in recent days they will not report to duty if the bill, which would limit the ability of the country's Supreme Court to review government actions, passes in the Knesset. The vote is scheduled for Monday.

• The Pentagon is concerned that the crisis facing the Israeli military could have negative implications for Israel's deterrence strategy and encourage Iran or Hezbollah to conduct military provocations that could escalate the situation in the region, a U.S. official told Axios.
• The crisis, especially within the Israeli air force, could also have negative operational implications for U.S. forces that closely cooperate with Israel in the region.

What he's saying: From the perspective of Israel’s friends in the United States, “it looks like the current judicial reform proposal is becoming more divisive, not less," Biden said in the statement.

• “Given the range of threats and challenges confronting Israel right now, it doesn’t make sense for Israeli leaders to rush this — the focus should be on pulling people together and finding consensus," he added.
• Flashback: Biden urged Netanyahu in a phone call last week to try and get a broad consensus for his judicial overhaul legislation. According to two sources briefed on the call, Biden told Netanyahu he isn't the only one concerned about where the prime minister is taking Israel, many Americans are too.

Driving the news: Anti-government demonstrations reached unprecedented levels over the weekend when tens of thousands of Israelis marched from Tel Aviv to Jerusalem in extreme heat to protest against the legislation. More than 250,000 Israelis demonstrated in Tel Aviv, Jerusalem, Haifa and other cities across the country on Saturday.

• Several hours after the demonstrations ended, Netanyahu was rushed to the hospital where he underwent emergency surgery to implant a pacemaker. He is expected to be discharged on Monday, just a few hours before the vote on the bill.

State of play: Israeli President Isaac Herzog, who on Sunday returned from the U.S. where he met with Biden and discussed the judicial overhaul, is making a last-ditch effort to reach a compromise between the government and the opposition on the legislation.

• He has proposed watering down the bill so it will leave the Supreme Court some authority to review government decisions on the basis of reasonableness.
• His proposal also includes a provision that would not allow the government to fire the attorney general. It would also suspend any further legislation regarding the judicial system for six to 18 months.
• Herzog met with Netanyahu at the hospital and then met with opposition leader Yair Lapid and former Defense Minister Benny Gantz. Lapid has said he supports the parameters of Herzog's proposal.

What to watch: The main gap between Netanyahu and Lapid is the amount of time the coalition will suspend any further judicial overhaul legislation.

• Lapid wants at least 15 months, but Netanyahu has only agreed to six months — half of which would include the Knesset recess period.
• Any decision to stop the current bill will have to be taken quickly. The vote is expected to begin on Monday at 5:00 am ET. If a deal is struck, the Knesset will have to pass a law to extend its summer session in order to have enough time to pass the compromise bill.

Editor's note: This story has been updated with additional details throughout.