(Reuters) - Israel´s top court struck down on Tuesday a law designed to encourage ultra-Orthodox Jews to join the military and the workforce, saying it had backfired by "entrenching" their blanket draft exemptions and protracted seminary studies.

The ruling was welcomed by Israel´s secular majority but could set off rifts in Prime Minister Benjamin Netanyahu´s conservative coalition government, which includes powerful religious Jewish parties.

The 2002 "Service Deferral Law" offered the ultra-Orthodox, who make up 10 percent of the population and are often welfare dependant, a choice, upon reaching draft-age, between studying in seminaries or working. The latter option entailed first enlisting in the military, with the possibility of serving in technology units where soldiers can learn a trade.

But by a vote of 6-to-3, the Supreme Court declared that the law, which was subject to review, was unconstitutional and ordered it not be renewed after it Expires in August.

"As time passed it became clear that the law had not realized the objectives that lie at its foundations, and that it in fact entrenched, for the most part, the arrangement of service deferral that had existed prior to its enactment," the court said in a summary of the ruling, citing the low military enlistment of ultra-Orthodox candidates.

"The law was enacted with a hope that it would ignite a societal process which would lead to a situation in which, even without imposing any duty, ultra-Orthodox people would wish to serve, or to perform civil service. However, the hope that accompanied the law was dashed."

The black-coated, ascetic ultra-Orthodox were a fringe sector when Israel´s founding prime minister, David Ben-Gurion, exempted them from the armed forces, which championed the mixing of men and women and whose commanders were mostly secular.

GOD, GUNS, GENDER

But the growing cultural and electoral clout of the ultra-Orthodox, many of whom question the authority of the Jewish state, has spread calls among other Israelis for a fairer distribution of national burdens.

Conscription is a core issue, given Israel´s constant war footing in a combustible Middle East and the military´s traditional role as melting pot for socially disparate Jews.

Sectarian tensions have been stoked by the occasionally aggressive gender segregation practiced by ultra-Orthodox in public places. Some pious mores have taken root within the armed forces, such as ultra- Orthodox soldiers requesting, in the name of sexual propriety, to stay away from compulsory events where women singers perform.

Netanyahu said after the ruling that the Service Deferral Law -- which is also known as the "Tal Law" -- could not continue in its current form and that the government would prepare a new law to "bring a more just change to the burden on all sectors of Israeli society."

Defense Minister Ehud Barak and Foreign Minister Avigdor Lieberman proposed providing perks for Israelis who enroll in national service, whether as conscripts or -- in the case of the ultra-0rthodox or Arabs, who are also exempt -- as volunteers.

But there were protests among religious coalition partners.

"I dispute that the Supreme Court has authority to decide what is and is not constitutional," Israel Eichler, a lawmaker with the United Torah Judaism party, said in a radio interview. "They are people who were not elected by the public but were political appointees."

Shas, another party run by rabbis in the coalition, said in a statement that its leader, Deputy Prime Minister Eli Yishai, was to confer with Netanyahu about the ruling.

Political sources said that the religious ministers were planning to lobby the Supreme Court to back a new arrangement that would replicate, at least in part, the expiring law. (Writing by Dan Williams) (© Thomson Reuters 2012. 02/22/12)