A justice ministry statement issued yesterday said the state attorney's office had informed the court that Netanyahu was sticking to his decision to freeze the January 2016 agreement, arguing it was non-binding and subject to government policy needs.
Netanyahu's right-wing government had agreed after a long campaign by reform Jewish groups to allow mixed worship at a section of east Jerusalem's Western Wall, the holiest place where Jews can pray.
The freeze angered the influential American Jewish community, the majority of whom follow more liberal strands of Judaism.
Israeli NGOs filed suit with the supreme court asking that it compel the government to honour the agreement and last month the court asked the government to reconsider the freeze.
"If the answer is in the negative," the court wrote at the time, the state should address the question "if the possibility exists in law to compel the government to implement the agreement."
It said Netanyahu "considered all the circumstances of the matter and decided not to bring the issue of the Western Wall to further discussion before the cabinet", the justice ministry statement said.
It added that the government also said the court could not force it to act.
"The issue is absolutely one of policy, the complexity and sensitivity of which does not need to be enlarged upon," it quoted the state attorney's office as writing.
"The government, by the nature of things, has broad discretion in the manner of resolving this issue," the government response added, asking the judges to throw out the lawsuit.
The Jerusalem Post daily said today that the court was expected to rule by January.
In accordance with strict ultra-Orthodox tradition, there are currently separate prayer sections for women and men at the wall, one of the last remnants of the Second Jewish Temple destroyed in 70 AD.
Women are also barred from leading prayers or bringing in Torah scrolls, and activists have for years been campaigning for equal prayer rights.
Ultra-Orthodox Jews represent about 10 per cent of the Israeli population.
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