The Islamist Ra'am party was on Tuesday, held hours-long deliberations with the Shurah - their religious council, to decide on the future of their participation in the coalition government.
A decision was expected on Wednesday, when the opposition bloc intends to table legislation to dissolve the Knesset, if Ra'am decides to part with the government of Prime Minister Naftali Bennett.
The party's main objection to the current government is over Israel's actions on the Al Aqsa Mosque compound on Temple Mount, the scene of violent clashes over the month of Ramadan.
The party was angered especially, by the prime minister's comments on Sunday, that Israel alone, as sovereign over Jerusalem, has the authority over the site which is third in importance to Muslims.
Ra'am demands the status quo which banns Jews from prayer on the site, must be maintained.
The party informed Bennett that they were suspending their participation in the coalition, but political observers say that party leader Mansour Abbas prefers to stall as long as he can, to allow a compromise to be reached.
Abbas said he would not be the reason for the coalition's demise.
But without Ra'am's support, the bill to dissolve parliament is expected to pass its preliminary hearing, after the predominately Arab Joint List announced it would support it.
An opposition win could have a snowball effect that would bring the Bennett government, which does not have a majority in the Knesset, to its end.
Ra'am also demanded that the government fulfil its obligations under the coalition agreement and legalize Bedouin construction in the Negev, and in other parts of the Arab sector.
The opposition criticized Bennett claiming his political survival is in the hands of an Arab Islamist body and therefore has no validity to remain in power.