By Maayan Lubell

JERUSALEM Israel's Supreme Court began hearing on Thursday the first in a series of appeals against a judicial overhaul being unfurled by Prime Minister Benjamin Netanyahu and his religious-nationalist coalition, which has set off an unprecedented domestic crisis.

A March amendment to a quasi-constitutional "basic law" limited conditions under which a prime minister can be deemed unfit, or incapacitated, and removed from office. The appellants - backed by Netanyahu's own attorney-general - want that voided.

The case being heard by three justices pits the Supreme Court against the Knesset, or parliament, situated shouting-distance away across a rose garden on a gentle Jerusalem hill.

"Clash Among Branches of Government - The First Test," read the main headline of the mass-circulation daily Israel Hayom.

Supporters of Netanyahu, who bounded back to a record sixth term in late December, cast Thursday's appeal - and others slated for next month - as a reminder of what they deem meddling by unelected judges in the democratic mandate of the coalition.

Critics see the Supreme Court as the last check on an executive working in lock-step with the legislature in a country that has no formal constitution.

That Netanyahu is on trial in three graft cases has further fuelled worries at home and abroad for Israel's democratic health. He denies any wrongdoing and has cast the criminal charges against him as a politicised witch-hunt.

"There's a desire here to create a judicial dictatorship," Foreign Minister Eli Cohen told public broadcaster Kan.

The appellant Movement for Quality Government in Israel argues that the March law "constituted another transition toward dictatorship" and "set a dangerous new precedent (whereby) the person possessing the premiership can change constitutional arrangements as convenient given the majority he has to hand".

On Sept. 12, for the first time in Israel, the entire 15-justice bench will convene to hear an appeal against another basic law amendment - this one curbing Supreme Court powers.

The legislation, ratified on July 24, removed the "reasonableness" standard of review which was among the court's tools to overrule government decisions. Critics of that amendment worry that it will encourage high-level corruption.

Both the incapacity and reasonableness amendments are part of basic laws that the court so far has refrained from quashing. Netanyahu has voiced hope that it will not do so now, and has been hazy on whether he would abide by any such ruling.

(Writing by Dan Williams; Editing by Andrew Cawthorne)