JERUSALEM (AP) ? Israel plunged toward a political crisis Tuesday after the largest member of the government quit, leaving Prime Minister Benjamin Netanyahu in charge of a hard-line coalition opposed to most Mideast peace moves.
The moderate Kadima Party voted to pull out of the government just two months after joining. The move appeared to push the country closer to early elections, a scenario that would paralyze Mideast diplomacy for months.
Even if Netanyahu manages to hold the truncated coalition together, the sudden crisis has broader implications for Mideast peace, leaving him in charge of a narrow parliamentary majority dominated by religious and nationalist hardliners who oppose concessions to the Palestinians.
Kadima leader Shaul Mofaz had brought the party into the coalition to work with Netanyahu on ending a contentious, decades-old system that has granted draft exemptions to tens of thousands of ultra-Orthodox Jewish seminary students. But with a court-ordered Aug. 1 deadline looming, the sides were unable to forge a compromise.
"We made a real effort to push toward a new law that would change the balance of service," Mofaz, a former military chief of staff, told a news conference.
Mofaz said he 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.
Kadima is the largest party in Israel's parliament, winning one more seat than Netanyahu's Likud Party in the last election, but it was left outside the government when Netanyahu set up his original hard-line team.
The draft exemptions have caused widespread resentment among Israel's secular majority, who are required to perform two to three years of compulsory service. Ultra-Orthodox leaders have been equally adamant in their refusal to compromise, claiming their young men serve the nation through prayer and study.
Netanyahu had sought a system that would gradually draft growing numbers of ultra-Orthodox over several years, and continue the exemptions for some of them. Mofaz wanted them incorporated much faster.
In a letter to Mofaz, Netanyahu expressed regret over Mofaz's 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."
It remained unclear what would happen after Aug. 1.
Netanyahu's government, torn between religious and secular parties, had been on the brink of collapse over the draft issue when Mofaz was lured into the government in an overnight deal in May. Those divisions are likely to hinder new attempts by Netanyahu to reform the draft.
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 formation of an interim Palestinian state while final borders are negotiated.
With Mofaz's departure, Netanyahu appears unlikely to float any bold proposals toward the Palestinians. During a visit this week by U.S. Secretary of State Hillary Rodham Clinton, the Palestinian issue barely factored in discussions.
Mofaz came under heavy criticism from political moderates to join Netanyahu last May.
"Political cooperation born in sin was destined to end," said former Kadima leader Tzipi Livni.
Yaron Ezrahi, a political science professor from Hebrew University, said Netanyahu would weather the storm.
He noted that peace efforts with the Palestinians have been stalled during Netanyahu's three-year tenure in any case, and there was little momentum to revive them.
"Who is talking about the peace process today?" said Ezrahi. "The peace process is paralyzed by the two leaderships, and not by the peoples, who are tired of war and craving peace."
Instead, Netanyahu will remain focused on working with the U.S. on preventing Iran from developing nuclear weapons ? an issue for which he has broad public support.
Ezrahi predicted the government will fail to draw up a new draft law, forcing Defense Minister Ehud Barak to formulate new regulations.
Barak said late Tuesday that he would begin drawing up a temporary proposal to begin drafting ultra-Orthodox soldiers.
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