Israeli Prime Minister Benjamin Netanyahu convenes a cabinet meeting at the Prime Minister’s office in Jerusalem, April 2, 2023. Photo: REUTERS/Ronen Zvulun/Pool

Prime Minister Benjamin Netanyahu said he has dropped a central element of a bitterly contested plan to roll back Supreme Court powers that has roiled Israel for months, though he was still pursuing changes to the way judges are selected.

In a filmed interview posted on the Wall Street Journal website on Thursday, Netanyahu said he was no longer seeking to grant parliament the authority to overturn Supreme Court rulings.

“I threw that out,” Netanyahu said of the highly-disputed ‘override clause.’

He said that another part of his nationalist-religious government’s plan that would give the ruling coalition decisive sway in appointing judges will be changed but not scrapped.

“The way of choosing judges is not going to be the current structure but it’s not going to be the original structure,” Netanyahu said without elaborating on details.

Netanyahu’s remarks upset his far-right police minister Itamar Ben-Gvir, who accused the premier of caving to protesters. “We were elected to bring governance and change, the reform is a cornerstone of this promise,” Ben-Gvir tweeted.

The Israeli shekel was down 0.6% on Thursday at a three-week low of 3.70 per dollar and Tel Aviv’s main share index dropped by 0.4%.

Stuart Cole, chief macro economist at Equiti Capital in London, said the shekel’s weakness came after the interview confirmed Netanyahu was pressing on with the judicial overhaul.

“So, not quite as radical as the contentious reforms originally planned, but still it seems changes are coming,” he said.

Netanyahu’s government unveiled its plan to overhaul Israel‘s justice system in January soon after it came to power, saying the Supreme Court had been increasingly encroaching into political areas where it had no authority.

The plan triggered mass protests, with critics saying it was a threat to democracy. Washington urged Netanyahu to seek broad agreements over reforms instead of rapidly driving unilateral changes it said would compromise Israel‘s democratic health.

After weeks of demonstrations and with financial markets increasingly nervous over the proposed changes and the ensuing political upheaval, Netanyahu paused the plan in late March for compromise talks with the opposition.

But after those talks were suspended this month, Netanyahu said he would press on with judicial changes. His coalition began work this week on a new bill that would reduce Supreme Court power to rule against the government by limiting ‘reasonableness’ as a standard of judicial review.

Opposition leaders offered no immediate reaction to the latest comments by Netanyahu, who is on trial on corruption charges he denies. His office did not offer additional details.