Israeli prime minister Benjamin Netanyahu on Monday announced a delay in his judicial overhaul plan, saying he wanted to give time to seek a compromise over the contentious package with his political opponents.

He made the announcement after two days of large protests against the plan.

“When there’s an opportunity to avoid civil war through dialogue, I, as prime minister, am taking a time-out for dialogue,” Mr Netanyahu said in a nationally televised address.

Striking a more conciliatory tone, he said he was determined to pass a judicial reform but called for “an attempt to achieve broad consensus”.

Immediately after his statement, the head of the country’s largest trade union said it would call off a general strike that threatened to grind Israel’s economy to a halt.

Mr Netanyahu spoke after tens of thousands of Israelis demonstrated outside parliament and workers launched a nationwide strike on Monday in a dramatic escalation of the mass protest movement aimed at halting his plan.

The chaos shut down much of the country and threatened to paralyse the economy.

Departing flights from the main international airport were grounded. Large shop chains and universities closed their doors, and Israel’s largest trade union called for its 800,000 members to stop work in health care, transit, banking and other fields.

Diplomats walked out at foreign missions, and local governments were expected to close pre-schools and cut other services. The main doctors union announced that its members would also strike.

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Israeli police scuffle with demonstrators in Tel Aviv (Ohad Zwigenberg/AP)

The growing resistance to Mr Netanyahu’s plan came hours after tens of thousands of people burst into the streets around the country in a spontaneous show of anger at the prime minister’s decision to fire his defence minister after he called for a pause to the overhaul.

Chanting “the country is on fire”, they lit bonfires on Tel Aviv’s main road, closing it and many others throughout the country for hours.

Demonstrators gathered again Monday outside the Knesset, or parliament, turning the streets around the building and the supreme court into a roiling sea of blue and white Israeli flags dotted with rainbow Pride banners.

Demonstrations in Tel Aviv, Haifa and other cities drew thousands more.

“This is the last chance to stop this move into a dictatorship,” said Matityahu Sperber, 68, who joined a stream of people headed to the protest outside the Knesset. “I’m here for the fight to the end.”

Mr Netanyahu spent the day in consultations with his aides and coalition partners before announcing the delay.

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Benjamin Netanyahu, right, on the floor of the Knesset (Maya Alleruzzo/AP)

Earlier, some members of his Likud party said they would support the prime minister if he heeded calls to halt the overhaul.

National security minister Itamar Ben-Gvir, who has been one of the strongest proponents of the plan, announced after meeting with the prime minister that he had agreed to a delay of at least a few weeks.

He said Mr Netanyahu had agreed to bring the legislation for a vote when parliament reconvenes for its summer session on April 30 “if no agreements are reached during the recess”.

Mr Netanyahu gave no timeline for a compromise to be reached in his speech, but expressed hope that the nation would heal and that people would enjoy the forthcoming Passover holiday.

The speech appeared to calm tensions, but it did not resolve the underlying tensions behind the protests.

Even before he spoke, the grassroots anti-government protest movement said a delay was would not be enough.

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Israelis protest outside the parliament in Jerusalem (Mahmoud Illean/AP)

“A temporary freeze does not suffice, and the national protests will continue to intensify until the law is rejected in the Knesset,” organisers said.

The plan, driven by Mr Netanyahu, who is on trial for corruption, and his allies in Israel’s most right-wing government, has plunged Israel into one of its worst domestic crises.

It has sparked sustained protests that have galvanised nearly all sectors of society, including its military, where reservists have increasingly said publicly that they will not serve a country veering toward autocracy.

Israel’s Palestinian citizens, however, have largely sat out the protests.

Many say Israel’s democracy is tarnished by its military rule over their brethren in the West Bank and the discrimination they themselves face.

The turmoil has magnified longstanding and intractable differences over Israel’s character that have riven it since the country was founded.

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Two demonstrators hug as mounted police disperse the crowds in Tel Aviv (Ohad Zwigenberg/AP)

Protesters say they are fighting for the soul of the nation, saying the overhaul will remove Israel’s system of checks and balances and directly challenge its democratic ideals.

The government has called them anarchists out to topple democratically elected leaders.

Government officials say the plan will restore balance between the judicial and executive branches and rein in what they see as an interventionist court with liberal sympathies.

At the centre of the crisis is Mr Netanyahu himself, Israel’s longest-serving leader, and questions about the lengths he may be willing to go to maintain his grip on power, even as he faces charges of fraud, breach of trust and accepting bribes in three separate affairs. He denies wrongdoing.

The firing of Mr Netanyahu’s defence minister at a time of heightened security threats in the West Bank and elsewhere, appeared to be a last straw for many, including apparently the Histadrut, the country’s largest trade union umbrella group, which sat out the months-long protests before the defence minister’s firing.

“Where are we leading our beloved Israel? To the abyss,” Arnon Bar-David, the group’s head, said in a rousing speech to applause. “Today we are stopping everyone’s descent toward the abyss.”