The Israeli government is unlikely to reach a deal on a new military draft law this session, potentially threatening the stability of the ruling coalition, a senior cabinet minister said on Thursday.

Prime Minister Benjamin Netanyahu's government is currently locked in a dispute over the wording of legislation to replace the so-called Tal Law, which allowed ultra-Orthodox Jews to defer military service.

Earlier this year, the Supreme Court ruled that the law, which is set to expire on August 1, was unconstitutional and needed to be rewritten, but there are sharp divisions within Netanyahu's coalition over the issue.

"So far, I'm sure by Sunday we won't be able to have this kind of legislation," said Strategic Affairs Minister Moshe Yaalon, referring to the next cabinet meeting.

"I am very pessimistic regarding our ability to make it during this Knesset session" due to end on July 29, he added.

The Tal Law allowed thousands of ultra-Orthodox men to avoid military service, which is otherwise largely compulsory for all Israelis, if they were engaged in religious study.

The law was originally touted as a way to allow some ultra-Orthodox to defer service briefly before eventually entering the military or civil service.

But the Supreme Court ruled that it had failed to ensure an equal burden of service for all and should be replaced when it expires.

Netanyahu's coalition has wobbled over the issue, with the centre-right Kadima party, which joined the government in May, giving the premier a massive majority, insisting on a law that will force all ultra-Orthodox to serve.

Kadima leader Shaul Mofaz wants the government to implement the recommendations of the so-called Plesner commission. It called for universal military or community service, with penalties for those who failed to comply, and has threatened to pull out of the coalition if the proposals are not implemented.

But Netanyahu's right-wing Likud party, as well as the ultra-Orthodox parties in his coalition, want a more gradual approach, and oppose individual sanctions.

Israeli observers have speculated about the possibility of a coalition crisis if a deal on a replacement law cannot be reached.

"Today we have a very stable coalition, but it might be that the Tal legislation... might create a crisis between us and Kadima," Yaalon acknowledged.

But he said that any crisis would most likely mean "the coalition will be smaller, but it will survive."

Yaalon said there were still key differences between Likud and Kadima on the new law.

"My way is a modest way," said Yaalon, a Likud member who also serves as vice prime minister and is close to Netanyahu.

"The way that I support is to do it gradually by having quotas, growing quotas... of those who are going to take responsibility and be drafted to the military or take national civil missions.

"The other way is to put a deadline, which is now 2016, by which all the ultra-Orthodox youngsters will be either recognised as students -- 1,500 (of them) -- and the (rest) will be forced to serve," he said.

"I believe it is too much. For the ultra-Orthodox, it seems like declaring war and I do not support it."