Deputy Prime Minister and chairman of Kadima Shaul Mofaz announced on Tuesday that Kadima was leaving the government coalition, according to Israeli newspaper Haaretz.
With the centrist Kadima leaving, the national unity government formed two months ago unravels, said The New York Times.
"It is with deep regret that I say that there is no choice but to decide to leave the government," said Mofaz, according to Ynet News. He said, "It wasn't easy to enter it, I paid a personal political price but this issue is fundamental, and there is no choice but to leave the coalition. Every concession will harm Kadima's image."
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Mofaz and his party left over disagreements over a proposed universal draft law, according to Haaretz.
The Times noted that the proposed law was being negotiated based on how to draft more ultra-Orthodox Jews as well as Arab citizens into the Israeli military.
The Jerusalem Post said Mofaz was unwilling to compromise on the issue and therefore felt he was left with no choice but to withdraw from the coalition.
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"Negotiations between Kadima and the Likud over the equal distribution of the burden have failed," said a statement by the party, according to Ynet News.
Prime Minister Benjamin Netanyahu reportedly send a revised proposal on Tuesday afternoon, but Mofaz said the proposal maintained the status quo, according to The Jerusalem Post.
Netanyahu said he hoped to pass the bill by the end of the month, resulting in more enlistment from the ultra-Orthodox and Arab communities.
Haaretz reported that the bill will be put to a vote on Thursday.