Israeli Knesset passes judicial overhaul bill despite mass protests, U.S. pressure

Israel's parliament on Monday passed the Netanyahu coalition's controversial bill that will significantly limit the Supreme Court's ability to review government decisions, despite mass protests and pressure from the Biden administration to not rush the vote.

Why it matters: It's the first piece of legislation that is part of Israeli Prime Minister Benjamin Netanyahu's judicial overhaul — a plan that has destabilized Israel's economy, military and foreign relations.

• Netanyahu and his right-wing coalition have for months faced mass anti-government protests over the plan. Thousands of Israeli reservists, including fighter pilots and members of the intelligence, cyber and special operations units in the IDF, warned in recent days they will not report to duty if the bill passed.
• President Biden has also called for the Israeli government to come to a broad consensus on judicial reform instead of pushing the plan unilaterally. In a statement to Axios on Sunday, Biden urged Netanyahu not to rush the bill, saying he was highly concerned about the "divisive" legislation and its potential implications.

State of play: The bill passed in its most extreme form 64-0, with the opposition boycotting the vote after no compromises were made.

• Thousands of Israelis rallied outside the Knesset building, with some chaining themselves to the gates and blocking roads in an attempt to prevent lawmakers from reaching the compound.
• The police dispersed the protesters several times using water cannons.

President Isaac Herzog, who had warned Monday that the country faced "a national crisis," attempted to get some kind of compromise between the government and the opposition, but the talks collapsed after Netanyahu refused to accept the opposition's demand to pass a law that would suspend any further judicial overhaul legislation for a year.

• “It is impossible to reach any understanding that will preserve Israeli democracy with this government," opposition leader Yair Lapid told reporters. "They want to dismantle the state. We have no way of continuing the dialogue with them. This is the most irresponsible government in the history of Israel."
• The Tel Aviv stock market plunged shortly after the talks collapsed with the shekel weakening.

Behind the scenes: The director of the Israeli Shin Bet domestic intelligence agency had briefed Lapid on Sunday and expressed concern that the country could deteriorate into chaos without a consensus around the bill, Israel's Channel 12 reported.

• Former Defense Minister Benny Gantz said Gen. Herzi Halevi, the IDF chief of staff, briefed him about the security situation and the crisis inside the military over the threats by thousands of reservists.
• Current Israeli Defense Minister Yoav Gallant said senior IDF officials briefed Israeli Cabinet ministers on Monday about the security situation and the implications of the protest on the IDF’s preparedness. The IDF, especially the air force, is highly dependent on reservists.
• The Prime Minister's Office said that Netanyahu, who was discharged from the hospital on Monday morning after having a pacemaker implanted, will meet the IDF chief of staff later in the evening.

What to watch: The Histadrut, Israel's main workers' union, announced minutes after the vote that it is starting the process of going on a general strike in the country. This process can take a few days.

• Shortly after the vote, a pro-democracy nongovernmental organization filed an appeal to the Supreme Court against the new law.

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