Conscription was adopted in 1948-1949. Military service in Israel has never been voluntary since the medinah became independent. The various legal mechanisms have varied.
If they abolished conscription (similar to most western democracies) or allowed for conscientious objection based on religious grounds (as they do for women), a large number of hareidim would work “on the books” (rather than for jobs within the frum community, as they do now). Given the horrendous conditions of military service (from a Ben Torah perspective, a dati leumi baal ha-bayit who follows less humras might find it more tolerable), being registered as learning full time is the only way of avoiding military service.