AMNA NAWAZ: We return now to the political turmoil in Israel and what, by many accounts, is an existential moment for the nation.

Has the crisis created by Prime Minister Netanyahu has government been averted or just postponed?

And what is the state of the now 75-year-old democracy?

Ambassador Daniel Shapiro was the American envoy to Israel during the Obama administration.

He's now a distinguished fellow at the Atlantic Council.

Ambassador Shapiro, welcome, and thanks for joining us.

Netanyahu's plan to overhaul the judiciary set off one of the deepest domestic crises in Israel's history.

Does the decision to delay that plan end the crisis?

DANIEL SHAPIRO, Former U.S.

Ambassador to Israel: It does not end the crisis.

It does buy some time.

The last 12 weeks in Israel have been utterly dominated by this issue.

Hundreds of thousands of Israelis have come into the streets to protest against it.

It was the source of nearly all news coverage, and heading into what is normally a very happy time of year, Passover holiday, then the Day of Independence, and Israeli celebrate with a lot of unity, the country was riven as it's rarely been in its history.

So, the announcement today that the prime minister is postponing work on this legislative package certainly buys time.

People are exhaling.

People are going to enjoy the holidays.

But he has said he's going to come back to the issue again when the Knesset, the Israeli Parliament, resumes session in May.

And by the end of that session, in July, he intends to pass a version of it.

He has said he wants to engage in dialogue and seek a more consensual type of overhaul the judiciary, something that would gain the support of some of the opposition parties.

But he has also said that, if that dialogue doesn't produce consensus, he's prepared to go back to his fairly narrow coalition and ram through the same package that he just put on the back burner.

So the crisis is not over.

But some time has been bought, and at least there's a pathway to try to get to a more peaceful outcome.

AMNA NAWAZ: Why do you think he took this approach at this moment, given the political landscape, given how dependent he is on his coalition?

Did he have any other option right now?

DANIEL SHAPIRO: He really is quite dependent on some parties in this coalition who are deeply hostile to the Supreme Court and badly want to weaken it, for different reasons, some because of the court's positions on West Bank settlements, some because of the court's positions on military exemptions for religious students.

And so, because that's the coalition he has, and the only one that can keep him in power, he's worked hard to deliver for them.

At the same time, he saw, as we all did, the incredible outpouring of opposition.

And, clearly, most polls in Israel showed that more than 50 percent of the country was not comfortable, felt that this was an overreach that would so weaken the Supreme Court that there would be no check and balance on the government's power and decisions it might make or laws it might pass.

Then, what really was the tipping point was yesterday, when his own defense minister from his own party, even a supporter of the judicial overhaul, said, this is not the time and this is not the way to pass it.

And the reason was that it's posing a risk to Israel's security.

Security is really the coin of the realm in Israel.

And Israelis took that warning seriously.

But Prime Minister Netanyahu was so troubled by the lack of support from his own defense minister that he fired him.

And that produced this spontaneous explosion of protest at even a higher level of intensity and emotion than we have seen before.

And it's so spooked members of his own party that they came to him overnight and said: Mr. Prime Minister, we really can't push this through now.

We need to pause.

And that was why I think he ultimately felt he had today to take this decision.

AMNA NAWAZ: That fired defense minister said today that he welcomed the delay, as did the head of the main labor union there, who called off the general strike that had been declared this morning.

But the protests do continue tonight, and there are some organizers who are also saying there will be another mass protest in Tel Aviv.

Do you see any way in which those protesters go home, they don't continue these protests, unless the plan is completely pulled?

DANIEL SHAPIRO: I think there will be a break.

I hope people will allow themselves to exhale and break over holidays.

But that doesn't mean this issue is over.

It won't surprise me, if on Saturday night, the usual protest night, there is a large protest because people feel it is precisely because they rallied that they prevented something very dangerous from happening that could have done great damage to Israel's democracy, Israel's economy, Israel's security.

And so they don't want to give up that energy.

And they don't want to let down their guard.

Probably, after the holidays, when the Knesset resumes and they start again trying to see if there's a way to pass this, these protests will still be there.

And many of the citizens who feel that they put their selves, their bodies, their time on the line to defend Israeli democracy will be back out there.

Israelis care very deeply about the fact that Israel has not known a day of its 75-year history that it was not a democracy, never missed an election.

And the idea that some of those features of Israel's democratic character could be put at risk I think will bring people back to the streets if they feel it is once again put at risk.

AMNA NAWAZ: Ambassador Shapiro, what position does this put U.S. and White House officials in?

We saw them today say they welcome this delay.

This gives people time and space.

They urged Israeli leaders to work towards compromise and noted that the hallmark of the U.S.-Israel relationship has been democratic principles.

When you look at this plan to overhaul the judiciary, is that consistent with democratic principles?

DANIEL SHAPIRO: Well, I think President Biden and Secretary of State Blinken had made pretty clear that they had some concerns about it.

They did it somewhat gently and somewhat broadly in public.

I think they were more direct and more specific and private, including in the president's recent phone call with Prime Minister Netanyahu.

And the president is a great believer in Israel, its legitimacy, its security, the U.S.' relationship.

He cares very deeply about it.

But he has always said that what really is the fundamental core of it is the common values of the two democratic countries.

And if at some point Israel were on a path that would take away some of those features of checks and balances, of rule of law, of separation of powers, and if it were to ram through changes to a system of government that don't embody consensus or some transparency, or taking the time to have the discussion that allows people to accept these changes and allows them to be enduring, that would cause damage to Israel's democratic character.

But, ultimately, that could cause damage to this partnership that both countries derive a great deal of benefit from.

So, he made that point.

He made it very, very clearly.

I think he's quite relieved by the decision to postpone the legislation today.

But I'm sure the president would be willing to come back and make those points again even more directly, if necessary, if that's the situation in June and July.

AMNA NAWAZ: That is Daniel Shapiro, former American envoy to Israel, and now distinguished fellow at the Atlantic Council.

Thank you for joining us.

DANIEL SHAPIRO: Thank you.