JERUSALEM – Israel´s prime minister on Tuesday moved to contain the first major crisis in his newly expanded coalition government after his most significant partner threatened to quit in a dispute over how to overhaul the country´s military draft.

Benjamin Netanyahu is rushing to meet an Aug. 1 court deadline to end a contentious system that has exempted tens of thousands of ultra- Orthodox Jews from serving in the army.

The explosive issue is threatening to drive Netanyahu´s new coalition partner, Kadima, out of the government. Kadima, led by Shaul Mofaz, a former military chief of staff, joined the coalition just two months ago with the aim of reforming the draft.

"If Netanyahu doesn´t keep his promises, then the crisis is going to be severe and there won´t be a partnership. There´s no middle ground here," Mofaz told the Yediot Ahronot daily.

The issue of the exemptions has become a major point of division in Israeli society.

Under a long-standing arrangement, ultra-Orthodox seminary students are permitted to skip mandatory military service in order to pursue religious studies.

This system, begun six decades ago by Israel´s founding fathers, was originally meant to allow several hundred gifted scholars to revive institutions of Jewish learning following the killing of 6 million Jews in the Holocaust.

The numbers of exemptions have swelled over the years, and today, more than 60,000 young religious men are exempt from military service.

These exemptions, combined with a refusal to enter the workforce and a sense that they are trying to force their strict religious mores on the general public, have bred resentment among Israel´s secular majority, where men are required to serve three years in the military, and women just under two years. Many must serve additional decades as reservists.

Modern Orthodox Jews, who make up about 15 percent of the Jewish population, serve in the military.

Earlier this year, the Supreme Court ruled the current system illegal and gave the government until Aug. 1 to formulate a new law.

Netanyahu put Kadima in charge of a special parliamentary committee created to draft the new legislation. But on Monday, he disbanded the committee over deep disagreements among its members.

Ultra-Orthodox parties oppose any change in the current system and refuse to cooperate with the committee. Two other parties quit the panel because the new law might not apply to Israel´s minority Arabs, who also do not serve in the military.

Following Netanyahu´s decision, Mofaz said the disbanded committee would still issue its recommendations on Wednesday. He said if Netanyahu did not take the "necessary step" of using the report as the basis for a new draft system, "the national unity government will come to an end."

An Israeli official said that Netanyahu was working to resolve the standoff. The official, speaking on condition of anonymity because he was not authorized to discuss the matter, said Netanyahu planned a series of meetings with coalition partners this week.

He said Netanyahu remains committed to key principles worked out with Kadima: Ensuring that all sectors of Israeli society share the burden of military and national service, implementing any changes gradually and maintaining national unity.

Officials have said they expect a final compromise to reduce, but not eliminate, draft exemptions for the religious and create some sort of civilian national service for Israeli Arabs.

It remains unclear whether Kadima will truly bolt the government. With 29 seats in the 120-member chamber, Kadima is the largest party in parliament. Recent polls have forecast it would plunge to roughly 10 seats if new elections are held.

Although Netanyahu would retain a narrow parliamentary majority, Kadima´s departure would be deeply embarrassing and rob him of a key moderating force in a coalition otherwise dominated by religious and nationalist hard-liners.

As he draws up a new draft law, without Kadima Netanyahu would also be subject to even more intense pressure from the remaining factions in the coalition, including the ultra-Orthodox Shas Party and the fiercely secular Yisrael Beitenu.

Neither showed any signs of bending.

"We will not compromise on a partial solution. We will not agree to any postponement," Yisrael Beitenu´s leader, Foreign Minister Avigdor Lieberman, told Army Radio. "At age 18, everyone needs to serve."

Interior Minister Eli Yishai, leader of the ultra-Orthodox Shas Party, said prayer and religious study had saved the country. "The state ... would not have been established without the Torah of Israel," he said.

Avraham Diskin, a professor of political science at the Interdisciplinary Center Herzliya college, said that with so much at stake, he expected Netanyahu to somehow forge a compromise.

"There is a possibility that the collation will lose its majority; that the government will collapse and they will call new elections," Diskin said, "but if I had to bet, I would bet that they would reach some sort of temporary formula or delay by the courts." (© 2012 The Associated Press 07/03/12)