Israel’s top court has struck down a major offshore gas deal between the government and a US-Israeli consortium.
The court said a “stability clause” was problematic as future governments would not be able to alter the agreement.
Critics had argued the deal on Mediterranean gas reserves was too generous to the companies involved.
Energy Minister Yuval Steinitz called the court’s ruling an “unfortunate decision”.
He said it would hurt Israel’s economy, energy security and tax revenues.
The Supreme Court suspended its ruling for a year, however, giving parliament a chance to amend the agreement before it is cancelled.
Israel’s discovery of major natural gas fields has in recent years raised hopes that it could become not only energy independent, but also a significant regional gas exporter.
Prime Minister and Economy Minister Benjamin Netanyahu appeared personally in court last month to defend the long-delayed deal with US firm Noble Energy, Israel’s Delek Group and other firms.
The consortium had reportedly agreed to spend $1.5bn (£1bn) over the next two years on the development of the Leviathan gas field, discovered in 2010 and one of largest in the eastern Mediterranean.
A government commitment not to change gas industry regulations until 2025 was conditional on that investment, Reuters reports.
Opposition leader Isaac Herzog praised the court’s decision as “correct and courageous”.
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