Tel Aviv - Israeli Prime Minister Benjamin Netanyahu fired a key Cabinet ally on Sunday, heeding a Supreme Court ruling commanding him to do so and deepening a rift over the power of the courts.

Netanyahu announced he was firing Aryeh Deri, who serves as Interior and Health Minister, at a meeting of his Cabinet. Israel's Supreme Court decided last week Deri could not serve as a Cabinet minister because of a conviction last year over tax offenses.

The court ruling came as Israel is mired in a dispute over the power of the judiciary. Netanyahu's far-right government wants to weaken the Supreme Court, limit judicial oversight and grant more power to politicians. Critics say the move upends the country's system of checks and balances and imperils Israel's democratic fundamentals.

According to his office, Netanyahu told Deri he was removing him from his post with "a heavy heart and great sorrow."

"This unfortunate decision ignores the people's will," Netanyahu told Deri. "I intend to find any legal way for you to continue to contribute to the state of Israel."

Deri said he would continue to lead his party and assist the government in advancing its agenda, including the legal overhaul.

Deri's firing is also expected to shake Netanyahu's governing coalition, a union buoyed by ultranationalist and ultra-Orthodox parties, including Deri's Shas, which is the third largest in the government. While some Shas lawmakers threatened to bolt the fledgling coalition in the aftermath of the court ruling, it is expected to survive Deri's absence and to attempt to craft legislation that would pave the way for his swift return.

Netanyahu is now expected to appoint other Shas members to replace Deri, at least temporarily.

Netanyahu's government, the most right-wing in Israeli history, has made overhauling the country's judiciary a centerpiece of its agenda. It says a power imbalance has given judges and government legal advisers too much sway over lawmaking and governance.

The plan has drawn fierce criticism from top legal officials, the chief justice of the Supreme Court, former lawmakers and tens of thousands of Israelis who have come out repeatedly to protest the overhaul.