Prime Minister Benjamin Netanyahu is hoping to postpone the issue to September, concerned that the Haredim could bring the government down over their funds being frozen.
Several haredi groups tried to reach a compromise with the help of Yesh Atid MK Moshe Tur-Paz but were blocked by Prime Minister Benjamin Netanyahu and Shas.
Jerusalem Affairs and Jewish Tradition Minister Meir Porush said the ruling is "leading to two states" of religious and secular Jews.
Both of the Knesset's haredi parties, Shas and United Torah Judaism, have expressed support for the hostage deal proposed by US President Joe Biden.
The seemingly inconsequential spat between the two parties touched on simmering political tensions on additional issues such as the haredi exemption from IDF service.
On opposite sides of the political spectrum, both Religious Zionism and the Labor Party have slipped beneath the minimum threshold to enter the Knesset.
With Netanyahu famous for pushing off decisions, expect Israel to try to reach an agreement with the bare minimum of haredi commitment.
The new legislation will ease Shabbat and holiday preparations for consumers, particularly those who are busy working and studying.
While the votes for Labor almost doubled since last week, they would still not get enough to cross the threshold.
MK Moshe Gafni launches a scathing attack on Israeli economists: 'Their war is not socio-economic or security-related, it's a war on religion.'
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