Hasidic faction in the Knesset refuses to accept the budget. Party members say they will not vote for the budget if it doesn't include exemptions for Talmud HaTorah students and rabbis.
Members of the Otzma Yehudit party have also pulled out of the coalition. The party says it will fight to keep the coalition in power, even if it means toppling the right-wing government and forcing a new one in from the left-wing. The coalition is expected to meet again on Thursday.