Ministers were to vote Sunday on a controversial proposal to anchor in law Israel's status as the national homeland of the Jewish people, at the expense of its democratic character.
The proposal would mean Israel would no longer be defined in its Basic Laws as "Jewish and democratic" but instead as "the national homeland of the Jewish people."
Critics, who include the government's top legal adviser, say the proposed change to the laws that act as Israel's effective constitution could institutionalise discrimination against its 1.7 million Arab citizens.
By giving preeminence to the "Jewish" character of Israel over its democratic nature, the law in its current format is "anti-democratic," they say.
But Prime Minister Benjamin Netanyahu insisted the law would give equal weight to both characteristics.
"There are those who would like the democratic to prevail over the Jewish and there are those who would like the Jewish to prevail over the democratic. And in the principles of the law that I will submit today, both of these values are equal and both must be considered to the same degree," he said.
As well as Netanyahu presenting his own vision of the bill to the cabinet, ministers were to be asked to vote on two other more extreme versions of the proposed law, drafted by far-right members of his Likud party.
The proposal has provoked uproar among MPs and ministers from the centre and the left, who fear the text only institutionalises discrimination.
Israel's Arab minority, who make up around 20 percent of the population, are descendants of the Palestinians who remained on their land after the establishment of Israel in 1948.
If the proposal becomes law, it would mean "the institutionalisation of racism, which is already a reality on the street, in both law and at the heart of the political system," warned Majd Kayyal of Adalah, the Legal Centre for Arab Minority Rights in Israel.
"Democracy guarantees that all citizens have the same rights and are equal before the state but this racist change introduces a distinction on the basis of religion," he said.
Attorney General Yehuda Weinstein, the government's legal adviser, has also criticised the proposal, saying it weakens the state's democratic character.
Last week, Justice Minister Tzipi Livni managed to postpone an earlier attempt to put the proposal to the vote.
The two versions of the bill which were to be put to ministers on Sunday represent a nod from Netanyahu to the most hardline elements of his party as talk grows of an early election.
But the final version of the text is likely to be more moderate, predicted Denis Charbit, a political scientist at Israel's Open University.
"This is a political charade. Netanyahu knows that voting on an unacceptable bill which has been criticised by the government's legal adviser is extremely problematic," he told AFP.
"The text proposed by Netanyahu is more moderate but it is still problematic because he disassociates the Jewish character from the democratic character of the state and this institutionalises a hierarchy between them, to the detriment of democracy."
Parliament is to vote on a preliminary draft of the bill on Wednesday, the Haaretz newspaper reported.