Prime Minister Benjamin Netanyahu is once again pushing the "NGO law", which will force Israeli human rights groups to disclose funding from foreign governments.
However, those in the Israeli government behind the legislation have softened the law's original draft in the wake of international pressure.
The law, which is currently being discussed in the Knesset Constitution, Law and Justice Committee, will require Israeli NGOs that receive 50 per cent or more of their funding from foreign governments to disclose this fact in their publications.
Critics of the law claim that it has been tailored to target human rights and advocacy groups identified with the political left.
The foreign funding comes principally from European Union members, including the British government. These governments have been pressuring Mr Netanyahu to drop the law.
Those behind the draft legislation have made two concessions: that the NGOs will not be required to reveal the governments which fund them when appealing to the High Court; and that their employees will not have to wear a distinctive badge while lobbying in the Knesset.
Left-wing politicians claim that the new law is discriminatory because it targets bodies which receive foreign funding from governments while leaving out those which receive foreign funding from private donors and foundations, as many right-wing NGOs do.
To get more Israel news, click here to sign up for our free Israel Briefing newsletter.