The Knesset was scheduled to discuss MK Amir Ohana's (Likud) bill to add gender identity to the list of aggravating circumstances in the criminal code on Wednesday.
However, coalition head David Bitton (Likud) removed it from the agenda, apparently as the result of demands from the haredi parties.
The bill would provide additional legal protection for transgender Israelis.
MK Ohana spoke out in fury over the move, saying: "The coalition head, not for the first time, is working against the Likud movement, against the Likud's values, and against the Likud's legislation, while retreating in the face of any threat to break up the coalition.
"It's too bad that this week - in which the Pride Parade is taking place in Jerusalem one year after Shira Banki was murdered - the bill against hate crimes, which would prevented spilled blood and violence, and which that I have been trying to pass since I entered the Knesset, is surrendered to violence by David Bitton."
Ohana claims that Bitton acquiesced "to the most homophobic minister in the history of the State of Israel and the Minister who is so popular among the Israeli public. Yaakov Litzman (UTJ), who is so afraid of the words 'gender identity' that he threatens to break up the coalition if they enter the law books under his watch."