Israel's Supreme Court on Monday narrowly struck down a controversial law that's part of the Netanyahu government's judicial overhaul and limited the court's ability to review government decisions.

Why it matters: The dramatic ruling could thrust Israel back into a constitutional and political crisis amid the war in Gaza and concerns about a potential war with Lebanon.

• A strong reaction by Israeli Prime Minister Benjamin Netanyahu and his radical right-wing political allies could push former Defense Minister Benny Gantz to leave the emergency unity government that was formed after the Oct. 7 attack.
• If Gantz, who is part of the opposition National Unity alliance, left the war cabinet, it would leave Israel with a radical right-wing government to make decisions about the war, which could have implications for U.S. support of the war in Gaza.

What they're saying: Netanyahu's Likud Party said in a statement that it is "unfortunate" that the court decided to publish a ruling that deals with a central disagreement in Israeli society amid the war in Gaza. "The court's ruling is opposed to the people's will for unity, especially in times of war," the party said.

• Gantz said in a statement that everyone must abide by the court's ruling. "There are no winners and losers today. We have one mutual goal – to win the war," he said. "After the war we will need to settle the relationship between the different branches of power through dialogue and broad consensus.".
• Opposition leader Yair Lapid said the court upheld its duty to protect the citizens of Israel. "If the government resumes the fight over the Supreme Court it will show they didn't learn anything from Oct. 7," Lapid said

Driving the news: The legislation the court struck down was passed last July. It limits the Supreme Court's oversight of government actions and policies and ends the court's ability to strike down government decisions and appointments on the basis of "reasonability."

• The law was the first piece of legislation of Netanyahu's judicial overhaul — a plan that destabilized Israel's economy, military and foreign relations.

The Supreme Court struck down the law in an 8-7 vote.

• The court ruled that the law should be canceled because it seriously and unprecedentedly damages Israel's democratic character.
• Twelve out of 15 Supreme Court judges ruled that the court has the authority to conduct judicial oversight on basic laws and intervene in extreme cases when the Knesset oversteps its legislative authority.
• A draft ruling was leaked a few days ago to Israel's Channel 12 in an unprecedented way that resembled the leak of the 2022 Roe v. Wade ruling in the U.S.
• After the leak, Netanyahu and his political allies called on the court not to publish the ruling, claiming it would be divisive if it happened in the middle of the war in Gaza. Some also hinted that they believed the ruling would be illegitimate because two of the judges who supported striking down the law had already retired.

Catch up quick: President Biden called for the Israeli government to come to a broad consensus on judicial reform instead of pushing the plan unilaterally.

• In a statement to Axios a day before that July vote, Biden urged Netanyahu not to rush the bill "given the range of threats and challenges confronting Israel."

Between the lines: Before Oct. 7, Netanyahu and his right-wing coalition had for months faced mass anti-government protests over the plan.

• Thousands of Israeli reservists, including fighter pilots and members of the intelligence, cyber and special operations units in the IDF, stopped reporting to duty after the bill passed.
• In the weeks before the law passed, Israeli intelligence services warned Netanyahu four times that the internal crisis around the judicial overhaul weakens Israel's deterrence and encourages its enemies in the region to consider attacking it.
• Since the Hamas attack, many in Israel have claimed Netanyahu's judicial overhaul created a domestic crisis that distracted Israel's attention from external threats and led to intelligence and security failure on Oct. 7.

Editor's note: This story has been updated with additional details throughout.