Tensions rose between Likud and Kadima party leaders over the weekend, both over a controversial Israeli army draft bill, as well as the nixing of a planned meeting with the Palestinian president.

Prime Minister Benjamin Netanyahu and Vice Prime Minister Shaul Mofaz locked horns over a clause in the new bill calling for punishments for ultra-Orthodox and Arab men who don't enlist in military or national service, local media reported on Sunday.

Netanyahu opposes imposing personal fines on evaders, fearing a crisis in his coalition with the ultra-Orthodox religious parties, who object to them. However, sources close to Mofaz told The Jerusalem Post that if the prime minister does not pass a draft law meeting Kadima's standards, they will leave the coalition - only two months after joining it.

"We're not afraid to return to the opposition, but we are not threatening yet," Mofaz's colleagues said.

"(Netanyahu) can't pass a bill without Kadima so the prime minister has to decide between a covenant with haredim (ultra- Orthodox) ... We call the sanctions personal responsibility," the source added.

Moreover, Mofaz's associates claim that the Prime Minister's Office torpedoed his planned meeting on Sunday with Palestinian National Authority President Mahmoud Abbas, following their disagreement over the conscription bill.

Netanyahu aides, however, roundly rejected what they called " embarrassing" claims, and told the Ha'aretz daily that the claims were "invented when the Palestinians announced the meeting was cancelled due to protests in Ramallah."

Earlier on Saturday, Palestinian sources said that the meeting planned for Sunday was "postponed due to public pressure on Abbas to cancel it."

The government-appointed Plessner Committee is charged with finding an alternative to the Tal Law, which regulates the ultra- Orthodox's service in the Israel Defense Forces (IDF). The Supreme Court struck down the decade-old law, which exempts religious students from military service, forcing the government to come up with an alternative by August 1.

Sources in the committee said last week its recommendations will include both benefits and sanctions.

Imposing military service on the country's religiously observant was among the terms of a unity government deal forged early May between Netanyahu and Mofaz, who was also a former defense minister.

Last Tuesday, Mofaz visited a protest tent erected by secular activists demanding that the burden of the army service and taxes be equally shared between different factions of Israeli society.

"We can't go back to the Tal Law," Mofaz declared at a press conference in the camp, "the change will never please everyone."