The "two tiered" (aka apartheid) legal system that Israel has had in the West Bank since 1967, where Jews have civil rights, the ability to vote in Israeli elections, and are subject to the jurisdiction of civilian courts, while Palestinians have no right to vote in Israeli elections, few civil rights, and are under the much harsher jurisdiction of military tribunals, failed to be reauthorized for the first time in 55 years. The blatantly discriminatory system has passed as a matter of course by the Knesset every five years, by both "left" and "right" Israeli parties in the past. The problem this time is the governing coalition depends upon an Arab party for the first time, and there is simply no way that an Arab party could support reauthorization.
For decades Israeli politicians have played this silly game. They point to the fact that there are Arab parties in the Knesset (representing only Arabs within the original 1948 borders of Israel, not the West Bank because West Bank Arabs can't vote for any Israeli parties) to claim that Israel is a real democracy. And yet, there was also a tradition of freezing Arab parties out of power. Both left and right refused to let Arab parties in the governing coalition, guaranteeing that notwithstanding Israeli Arab's vote in Parliamentary elections, they could not have any real political power.
That changed last year, when the opponents of Netanyahu realized the only way to prevent him from being Prime Minister again would be to bite the bullet and let an Arab party into the governing coalition. But with the pro-Netanyahu parties unwilling to give the governing coalition a win, they voted against reauthorization of the two-tiered West Bank legal system. That meant reauthorization depended entirely upon every vote from the governing coalition to pass, which includes the vote from members of the United Arab List. When the United Arab List voted no, that meant the measure could not pass.
I guess in theory that means that everyone living in the West Bank will be under military occupation rule until they find a way to get that reauthorized. In practice, I can't imagine the Israeli military will start rounding up settlers, imprisoning settler children, and demolishing settlers' homes whenever any settler throws a stone. That will never happen. Aside from the fact that many of the soldiers enforcing the occupation are from settler families themselves, Israeli society will simply not tolerate the application of their own harsh policies used against West Bank Arabs for decades to be used against Jews. So they will either make sure the law is reauthorized (even if it means letting Netanyahu back in power), or they will find another way to keep their apartheid system. I'm guessing if all else fails, the Israeli courts will come to the rescue and find that the core values of Israel as a Jewish state require it to not treat Jewish settlers as shitty as they treat native people in the occupied territories.
