Israel’s coalition government is teetering on the brink of collapse after a dramatic Knesset showdown over legislation to extend legal protections for settlers in the occupied West Bank. In what was variously described by Israeli media as “one of the most surreal votes in Israeli history” and “political suicide”, the first reading of a bill renewing civilian legal rights for Jewish settlers in the West Bank failed to pass on Monday night. Members of the Knesset had to weigh up their positions on both the bill, and whether it was more important to strengthen or weaken the ideologically diverse coalition, which recently lost its razor-thin majority. Elements of the government opposed to the bill were cajoled into voting in favour over fears that failing to pass it could help bring down the coalition that ousted long-time prime minister, Benjamin Netanyahu, just under a year ago. Meanwhile rightwing opposition members voted against, even though they support settlement building, meaning the bill failed by a 58-52 margin. “Yesterday shows how fragile the government is now,” said Naama Lazimi, a new member of the Knesset (MK) for the government’s centre-left Labor party, in her Knesset office on Tuesday. “I knew my task: support the law, don’t destroy the government. Even if they kill this bill they’ll pass it in a different configuration.” Under different circumstances, the two-state solution activist said she could have voted against. “But not supporting this government is a position only the very privileged can take. The choice is between this government and the far right, neo-liberals and [the religious]. We need to give this government time to achieve.” Emergency regulations in place since the occupation of the Palestinian territories began in 1967 and renewed by the Knesset every five years have created two parallel legal systems in the West Bank, where about 500,000 Jewish settlers live in breach of international law but have Israeli citizenship. The 3 million Palestinians in the same area have been subject to Israeli military law for decades, a situation that three major human rights groups have said amounts to apartheid. If the legislation is not renewed, or a modified version passed by the end of June, Israeli settlers will automatically become governed by military rule – a development that could throw into chaos the tax and policing system for Israelis in the West Bank, bring into question the status of Palestinian inmates being held in Israeli prisons and almost certainly lead to the collapse of the government. The governing coalition of eight parties, sworn in a year ago, encompasses leftists who oppose settlement building; rightwingers, such as the prime minister, Naftali Bennett, who previously led a settler lobbying group; and, for the first time, members of an Arab party. Initially united by their desire to remove Netanyahu and end years of political deadlock, an agreement to maintain the “status quo” by focusing on areas of common ground has proved very difficult in practice. “This coalition experiment was a big mistake. It’s paralysed,” Ahmad Tibi, the leader of the opposition’s Arab-majority Ta’al party, said on Tuesday. “Everyone is voting against their conscience. Last night we even had Ra’am [the Arab party in the ruling coalition] voting for apartheid. Everyone else is always calling us to find out how we’re voting. We brought this bill down … because we’re the only faction in the Knesset actually voting for what we believe in.” As it lurches from crisis to crisis – many triggered by the rightwing opposition, led by Netanyahu’s Likud party, which is determined to vote against every single bill in order to bring down the government – Israelis have been left wondering how long a coalition torn by divisions can last. “As always after we lose, we will return stronger and win in the next round,” said the foreign minister, Yair Lapid, the chief architect of the governing alliance, in a statement on Twitter. Nationalist party New Hope, part of the coalition, has already threatened to exit the arrangement if the government cannot pass the West Bank settler legislation. If New Hope leaves, it could give the opposition the votes it needs to trigger new elections or form a new government – potentially paving Netanyahu’s path back to office despite the corruption cases against him.