Defense Minister Avigdor Lieberman also provided the government with some breathing space by announcing he did not intend to quit for now - even though he opposes the legislation upon which the compromise deal is based.
He has repeatedly said he wants the coalition to last its entire term, which ends in November 2019, but some members of his coalition suspect him of allowing the crisis to worsen to expedite elections. One poll predicted Likud would win as many as 34 seats if elections were held now. The Israeli military said it shelled unspecified targets in neighbouring south Lebanon shortly after cross-border rocket fire hit northern Israel.
The ultra-Orthodox parties, which possess 13 of the government's 66 seats in the 120-seat parliament, threaten to leave the coalition if a law granting ultra-Orthodox men exemption from conscription fails to pass.
The military bill is backed by the ultra-Orthodox United Torah Judaism party, and is seen by its opponents - including Liberman and Finance Minister Moshe Kahlon - as giving the ultra-Orthodox sector a legal way to dodge the draft.
"It is a fake crisis that can be resolved".
The coalition has been at loggerheads since ultra-Orthodox parties said they would not support next year's budget unless a law is passed to exempt religious students from military service.
On Monday, the ministerial committee gave approval to the bill.
"If the law is passed in its current form - we're out", Yisrael Beytenu MK Oded Forer told Channel 10 on Monday. Though he has become a responsible cabinet member ("the most adult among them", we hear sometimes) and apparently not a bad minister of defense, the Russian base of his party is shrinking and one of the former members of his parliamentary faction has chose to form her own party thus competing with the man who once was her boss. "I know that I saved you from massive disappointment, because had there been elections I'd be back here [at the lectern] and you'd continue to offer commentary [from the back benches]".
Israel's Defense Minister Avigdor Lieberman, who heads a hawkish secular party, is the leading coalition member against the draft exemptions.
Netanyahu could call for early elections, both as a way to shore up his narrow coalition and affirm his public standing in the face of multiple corruption charges. Netanyahu teased political rivals at a speech in the Knesset plenum following the agreement, referring to the scenario of early elections being called.
Netanyahu's opponents have been calling on him to resign since police recommended February 13 that he be indicted on bribery and fraud charges in two influence-peddling cases; police are still investigating a third case in which several former close aides have agreed to testify against him.