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Thousands demonstrate in the streets of Tel Aviv on Saturday in opposition to Israeli Prime Minister Benjamin Netanyahu's new right-wing coalition and its proposed judicial reforms to reduce powers of the Supreme Court.AMIR COHEN/Reuters

Benjamin Netanyahu’s bid to take political control over Israel’s judiciary has brought the powerful Prime Minister into a deepening conflict with the country’s vaunted tech sector and with economic elites who warn he is courting democratic disaster.

The latest plea for Mr. Netanyahu to reconsider came from Israel’s President Isaac Herzog, who in an unusual Sunday night address pleaded for a compromise plan that could modestly curb court powers to overturn legislation while preserving judicial independence.

“We are on the brink of a social and constitutional collapse,” Mr. Herzog warned. “The powder keg is about to explode.”

He spoke hours before demonstrators are expected to mount their latest attempt to force Mr. Netanyahu’s hand, with protests around the Knesset and calls for a general strike they hope large numbers of workers will heed.

Although Israel’s President occupies a largely ceremonial role, Mr. Herzog joins Nobel laureates, past governors of Israel’s central bank, military generals, tech entrepreneurs, a former Mossad chief and former heads of its National Security Council in condemnation of Mr. Netanyahu’s proposed changes, which would allow a simple legislative majority to overrule the Supreme Court and empower politicians to appoint judges.

So far, Mr. Netanyahu has shown no definitive sign of bending. First reading of a bill on appointment of judges is expected Monday, although Israeli media reported Sunday night that a delay is possible.

“We are not really concerned” about the criticism, said Eli Hazan, the foreign affairs director at Mr. Netanyahu’s Likud Party.

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Polls have shown that more than 60 per cent of Israelis want the legislation halted or delayed. The proposed changes are widely seen as an effort at self-preservation by Mr. Netanyahu, who has been fighting charges of fraud, breach of trust and accepting bribes.

But Mr. Hazan claimed Mr. Netanyahu enjoys the support of a “quiet majority,” saying critics need not worry “because we are going to restore democracy.” He said courts have exerted too much power.

Those who warn the country is hurtling toward disaster counter that opposition is building.

“Huge numbers have been woken up,” said Tomer Avital, who has helped to organize protests. Though labour unions have not supported the Monday strike, some tech employers have given their workers the nod to participate. “They prefer to lose money than to lose democracy,” Mr. Avital said.

Political scientists suggest success is likely for a cause that can bring 3.5 per cent of a population to the streets, “and we are very close to 3.5 per cent,” said Zvi Eckstein, an economist and scholar who is a former deputy governor of the Bank of Israel.

Mr. Netanyahu’s proposals, he said, would do to Israel what the Jan. 6 rioters in Washington would have done to the U.S. had they succeeded in overturning the election and reinstalling Donald Trump as president.

Such dire warnings have been dismissed by the country’s leadership.

“They say that we are alarmists, that we are creating the panic, that we are fomenting this self-fulfilling prophecy,” said Manual Trajtenberg, a former politician who was first chair of the Israeli National Economic Council. Still, he is pleased by the extent of opposition to the judicial changes. “That in itself is very reassuring, because it’s a reflection that democracy in Israel is alive and kicking,” he said.

Some of the most insistent opposition has come from a tech sector that has become the economic heart of a country sometimes dubbed the “startup nation.” High-tech exports make up more than half of Israel’s total and the sector’s richly compensated workers contribute a quarter of the country’s income taxes, even though they make up less than a tenth of its work force.

But Mr. Netanyahu’s proposal has created widespread fear that tech’s future will dim. Laptop-equipped workers can easily decamp for other places. So can venture capitalists whose cash Israel has spent decades wooing. “Reversing that is very easy,” said Dror Salee, a serial entrepreneur who has been a prominent leader in an Israeli high tech workers’ protest task force.

Risk-averse investors have already shown signs of reluctance. Eitan Kyiet, a tech investor who is co-founder of an influential Haifa innovation centre, knows of one merger between a German and an Israeli company that is “being postponed because of the unstable political environment.” Some companies have discussed moving capital out of Israel. Mr. Netanyahu is “pressing the self-destruct button on the basic rules of democracy,” Mr. Kyiet said.

Leo Bakman, who founded the Israel Innovation Institute, also worries that the judicial changes risk breaking a social compact, fracturing the notion that government should work for all. Some of that is already rising to the surface, he said. “People are starting to drive much more aggressively, for example.”

The innovation institute has sought to expand tech’s reach in Israel, seeking to ensure the country is “not becoming too much of a dual economy, where parts of Israel are high-tech and the rest is the third-world,” he said.

But the proposed judicial changes are set against deepening social divisions that have accompanied some of those very disparities. Statistics show only 3 per cent of Israel’s tech workers are ultra-Orthodox Jews (who make up 13.5 per cent of the population) and 2 per cent are ethnically Arab (20 per cent of the population).

The country’s Supreme Court is similarly homogeneous. “How come Israeli society is very diverse and we don’t have a diverse Supreme Court?” argues Mr. Hazan, the Likud director.

Still, he refuses to say which sectors of the Israeli economy support the proposed changes. “It’s not a fair question,” he said, suggesting business leaders wish to avoid blowback. He likened detractors to Joseph Stalin.

Critics have warned that Mr. Netanyahu is seeking to take Israel in the direction of Hungary and Poland, places moving toward autocratic democracy, with increasingly stifling academic, artists and economic environments.

A former student of Niron Hashai, dean of the Arison School of Business at Reichman University, used LinkedIn to find that more than two-third of Google’s Israeli workers live in Israel compared with half or fewer of those from Hungary and Poland. It’s not definitive data. But “it’s very indicative,” he said.

Prof. Hashai passed up academic opportunities elsewhere to live and work in Israel. But he has found himself contemplating whether that is sustainable if the judicial changes are made. “You already see people here that are afraid to talk, and this is something crazy,” he said.

Israel is where “I belong,” he adds. But “there are limits to what someone is willing to tolerate.”

He tries to push the thought away. “Let’s not think about it,” he said. “It’s too sad.”