More than 20 non-governmental organisations (NGOs) and political parties arranged a large demonstration in central Tel Aviv. Israeli President Shimon Peres is the latest political figure to weigh into the heated row over a parliamentary inquiry into non-governmental organisations.
He called on the Knesset to reject the plan, stating that such investigations should be left to "law enforcement authorities".
On Saturday, several thousand Israelis took to the streets of downtown Tel Aviv to show their opposition to the inquiry and a whole series of laws proposed by the governing right-wing coalition.
They blew whistles, beat drums and chanted pro-democracy slogans. Many waved the Israeli flag and a few carried Palestinian ones.
"We came to protest against the government's policies and the lack of democracy in our country," said Tal, a demonstrator in his twenties. "We're also showing that we support the peace process."
"I think that Israeli society is going to very dark places because of our foreign minister and prime minister," added a local woman, Karen.
"People who aren't Jewish and aren't on the extreme right are facing political delegitimisation."
Conservative initiative
Yisrael Beitenu alleges IDF soldiers are being betrayed by some leftist groups.
The Yisrael Beitenu party, led by the ultra-conservative Foreign Minister, Avigdor Lieberman, wants to set up a commission of inquiry to examine the funding of leftist groups.
It claims they work under the guise of human rights advocacy to encourage draft dodging and accuse Israeli soldiers of war crimes.
Some organisations are accused of providing material to the unpopular Goldstone Commission established by the United Nations Human Rights Council to investigate the military offensive in Gaza two years ago.
"They are not reporting on human rights," says David Rotem, of Yisrael Beitenu, who chairs the Knesset's law, justice and order committee.
"They are working for foreign organisations and hostile organisations... They are trying to fight against the state of Israel."
Racism claims
The mainly right-wing governing coalition denies there are political motivations behind the planned inquiry, but as Saturday's rally showed, few on the left accept that.
Continue reading the main story Controversial bills before the KnessetPledge of Allegiance bill - obligates new citizens of Israel to pledge allegiance to a Jewish, democratic stateNakba bill - denies state funding for groups that commemorate Israel's establishment as a catastrophe or "nakba" for PalestiniansInfiltration bill - stipulates prison terms for "infiltrators" and those helping them although humanitarian groups say it may affect refugeesBill Against Boycott - those who back any anti-Israel boycott can face criminal chargesAdmissions Committees bill - allows communities to reject unwanted new members on ethnic, religious or political grounds
Banners accused it of racism, persecution and McCarthyism - a reference to the political witch-hunts seen in the United States in the 1950s.
In the past months, various bills have also targeted those seen as disloyal to the state. The Israeli Arab minority that makes up about 20% of the population has been singled out.
"There is legislation in the pipeline that is meant to limit the actions of human rights organisations and others critical of the current Israeli government," says Ronit Sela of the Association for Civil Rights in Israel.
"Some is aimed at Israeli Arabs, for example demanding they pledge allegiance to a Jewish and democratic state.
"All these propositions are made in the Knesset without members realising how much they undermine the values of democracy and equality in the country," Ms Sela says.
Divided politics
Continue reading the main story “Start Quote[Foreign Minister Lieberman] really knows how to play on the Israeli psychology... He can speak to their guts, not their minds.”
End Quote Idan Kweller Israeli commentator
Reactions to the various legislative proposals reflect the complicated divisions in Israel's political scene where the Prime Minister, Benjamin Netanyahu controls a slim Knesset majority.
The head of the centrist opposition Kadima party, Tzipi Livni, described how "an evil wave" was sweeping the nation.
"The Netanyahu-Lieberman government fans the flame of fire," she recently remarked.
Within the Labour party, already split over the breakdown of peace talks with the Palestinians, disputes over the parliamentary measures contributed to further infighting. Finally, on Monday, the leader, Ehud Barak, quit the party.
So divisive has the NGO inquiry proven that it prompted Mr Netanyahu to publicly rebuke his outspoken foreign minister after Mr Lieberman criticised some senior members of the prime minister's Likud faction who opposed it.
Drift to the right
Mr Lieberman is himself under long-term investigation for corruption. This could force him to resign from the government in the coming weeks to face charges.
The hardline foreign minister is often controversial but has committed followers.
However, his party, which holds a crucial 15 seats, is expected to remain in the ruling coalition.
According to commentator Idan Kweller the right-wing drift of Israeli politics means that if the hardline minister successfully fights off accusations against him, he will continue to be an important player.
"The biggest problem Mr Lieberman has is his style and the way he speaks, but many Israelis agree with his motives," says Mr Kweller. "He really knows how to play on the Israeli psychology."
"He recognises what makes Israelis nervous when they look at the political agenda, or their Arab neighbours or the situation with the Palestinians. He can speak to their guts, not their minds."
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