The dispute between Prime Minister Benjamin Netanyahu and Kadima leader Shaul Mofaz over universal conscription escalated Friday when Mofaz denied Netanyahu’s claim that the two leaders had agreed to establish an alternative to the Plesner Committee to look into a replacement for the Tal Law.

Mofaz said he would be attending a demonstration in Tel Aviv on Saturday night, led by IDF reservists, called to demand that ultra-Orthodox and Arab Israelis perform military or alternative national service. The organizers of the demonstration, which is to include busloads of individuals from around the country, said they do not trust Netanyahu’s overtures. “We are not involved with politics, or politicians,” the organizers added. They made clear that neither Mofaz, nor any other Israeli politicians, would be permitted to speak at the event.

The Prime Minister’s Office sent out a statement Friday saying the two leaders’ intensive negotiations that ran late into the night Thursday enabled them to reach an agreement on the establishment of a new, six-member team within a week. But Mofaz issued a denial just a few minutes later, saying that was not the case.

Behind the scenes, sources said Mofaz and Netanyahu had agreed to form a new team to draw up legislation “on the basis” of the Plesner committee’s recommendations, but that Mofaz subsequently decided to dig in his heels. Insiders predicted that Netanyahu and Mofaz could try again to find a compromise early next week.

Mofaz said he stood behind the recommendations put forward by the Plesner Committee, the body that was tasked with finding a replacement to the Tal Law, which is set to expire August 1. That committee was unilaterally dismantled by Netanyahu early last week, but its chairman, Kadima MK Yohanan Plesner, presented its recommendations anyway on Wednesday. These include requiring military or alternative national service for all ultra-Orthodox men by age 22, exemptions for some 1,500 exceptional Torah scholars, and personal punishments for draft dodgers. Plesner also called for legislation on service in the Arab sector to be passed by early 2013.

Netanyahu has given lukewarm praise to the recommendations as a basis for further discussion. Mofaz has said they need to be accepted, or his Kadima party’s two-month coalition partnership with Netanyahu’s Likud will be curtailed.

Mofaz said that after a day of negotiations with the prime minister, it became clear “that Netanyahu is not willing to publicly embrace the recommendations of the Plesner Committee, but only set up a new committee.”

He added the time had come to pass legislation that equalizes the burden of military conscription, and that “there is no need for another committee.”

Despite Mofaz’s indignation, Netanyahu’s office said it is hopeful the two leaders will be able to to find a proper replacement to the Tal law by the deadline of August 1 set by the court

According to the PMO’s statement, National Security Council head Yaakov Amidror and Ministers Moshe Ya’alon and Yossi Peled were chosen by Netanyahu to sit on the envisaged new panel. Mofaz’s three choices were not yet determined, the PMO indicated.

Labor leader Shelly Yachimovich responded to the latest public disagreement between Mofaz and Netanyahu by calling again on the prime minister to dissolve the Knesset and hold elections. She called it a shame that the issue of national military service has been made into a cause for “spin” rather than an opportunity for deep analysis and constructive action.

Yachimovich also accused the prime minister of being hasty and “constantly putting out political fires” without dealing with the root of problems.