Talks in Israel on creating a new bill aimed at conscripting ultra-orthodox Jews and Arabs broke down as an intense argument between Yohanan Plesner (Kadima) and Vice Prime Minister Moshe Ya'alon (Likud) erupted on Wednesday.

Ya'alon and Kadima Knesset (parliament) member Yohanan Plesner were in the midst of talks with a number of government ministries when the developing deal hit a snag.

"This is a withdrawal from all that's been achieved so far -- we're at a dead end," sources close to the talks told the Walla news site.

"Likud has backed off of all it's agreements, including on draft age and personal and institutional responsibility," the sources said, adding "this looks like the biggest crisis since they began work this week."

However, according to Ya'alon, Likud is "trying to formulate a bill with an outline for gradual implementation that, even if it won't satisfy everyone, will not rip the nation apart and will lead to a substantial increase in those bearing the burden" of military service, Ha'aretz daily said.

But Kadima is blaming Ya'alon over a clause calling for punitive actions, including levying fines and even jail terms for draft dodgers, according to Israel Radio.

Kadima party chief, Vice Prime Minister Shaul Mofaz called for an emergency meeting late Wednesday afternoon, to discuss what may blow up into a coalition crisis.

Meanwhile, Prime Minister Benjamin Netanyahu is reportedly trying to bridge the gaps between the opposing stances.

The move came just three days after Plesner, at the start of the talks to hammer out the fine points of the legislation, said he hoped "to draft the new law in the coming days and express this historic moment."

While ultra-Orthodox parliamentarians vehemently oppose personal sanctions, which Kadima insists upon, both sides are threatening to dissolve the coalition if they don't get their way.

Also, an official at Foreign Minister Avigdor Lieberman's Yisrael Beiteinu party told Xinhua Wednesday that they will not vote for any version of the law that does not call for enlistment at age 18 as opposed to deferment until age 22-23.

The Plesner Committee, charged with reforming the old conscription law, became the most talked about topic in Israel in recent weeks.

The committee tendered its recommendations last Wednesday, two days after it was dissolved by the prime minster. Among its conclusions is a controversial clause of levying heavy fines on draft dodgers.

The committee and the sanctions issue have been the eye of a political cyclone threatening to dismantle the recently-formed unity coalition government.

The Supreme Court struck down the decade-old Tal Law in March. The law allowed yeshiva (Jewish religious seminary) students to indefinitely defer their conscription, causing the ire of many sectors in the Israeli society.

After a stormy demonstration by tens of thousands of Israelis Saturday night, Prime Minister Benjamin Netanyahu declared at the weekly Sunday cabinet session the recommendations will be incorporated into a new draft bill.