diff --git a/pkg/engine/variables/vars.go b/pkg/engine/variables/vars.go
index fbdf2e5dfe..9516397dd5 100644
--- a/pkg/engine/variables/vars.go
+++ b/pkg/engine/variables/vars.go
@@ -18,9 +18,9 @@ import (
 	"github.com/kyverno/kyverno/pkg/engine/operator"
 )
 
-var RegexVariables = regexp.MustCompile(`^\{\{[^{}]*\}\}|[^\\]\{\{[^{}]*\}\}`)
+var RegexVariables = regexp.MustCompile(`^\{\{(\{[^{}]*\}|[^{}])*\}\}|[^\\]\{\{(\{[^{}]*\}|[^{}])*\}\}`)
 
-var RegexEscpVariables = regexp.MustCompile(`\\\{\{[^{}]*\}\}`)
+var RegexEscpVariables = regexp.MustCompile(`\\\{\{(\{[^{}]*\}|[^{}])*\}\}`)
 
 // RegexReferences is the Regex for '$(...)' at the beginning of the string, and 'x$(...)' where 'x' is not '\'
 var RegexReferences = regexp.MustCompile(`^\$\(.[^\ ]*\)|[^\\]\$\(.[^\ ]*\)`)
@@ -28,7 +28,7 @@ var RegexReferences = regexp.MustCompile(`^\$\(.[^\ ]*\)|[^\\]\$\(.[^\ ]*\)`)
 // RegexEscpReferences is the Regex for '\$(...)'
 var RegexEscpReferences = regexp.MustCompile(`\\\$\(.[^\ ]*\)`)
 
-var regexVariableInit = regexp.MustCompile(`^\{\{[^{}]*\}\}`)
+var regexVariableInit = regexp.MustCompile(`^\{\{(\{[^{}]*\}|[^{}])*\}\}`)
 
 var regexElementIndex = regexp.MustCompile(`{{\s*elementIndex\s*}}`)
 
diff --git a/pkg/engine/variables/vars_test.go b/pkg/engine/variables/vars_test.go
index 7d6dd2081d..c92e215681 100644
--- a/pkg/engine/variables/vars_test.go
+++ b/pkg/engine/variables/vars_test.go
@@ -289,6 +289,36 @@ func Test_subVars_withRegexMatch(t *testing.T) {
 	assert.Equal(t, string(out), expected.String())
 }
 
+func Test_subVars_withMerge(t *testing.T) {
+	patternMap := []byte(`{"map": "{{ merge(` + "`{\\\"a\\\": 1}`, `{\\\"b\\\": 1}`" + `)}}"}`)
+
+	resourceRaw := []byte(`{}`)
+
+	expectedRaw := []byte(`{"map": {"a":1,"b":1}}`)
+
+	var err error
+
+	expected := new(bytes.Buffer)
+	err = json.Compact(expected, expectedRaw)
+	assert.NilError(t, err)
+
+	var pattern, resource interface{}
+	err = json.Unmarshal(patternMap, &pattern)
+	assert.NilError(t, err)
+	err = json.Unmarshal(resourceRaw, &resource)
+	assert.NilError(t, err)
+	// context
+	ctx := context.NewContext()
+	err = ctx.AddResource(resourceRaw)
+	assert.NilError(t, err)
+
+	output, err := SubstituteAll(log.Log, ctx, pattern)
+	assert.NilError(t, err)
+	out, err := json.Marshal(output)
+	assert.NilError(t, err)
+	assert.Equal(t, string(out), expected.String())
+}
+
 func Test_subVars_withRegexReplaceAll(t *testing.T) {
 	patternMap := []byte(`{
 		"mutate": {
diff --git a/test/cli/test/jmespath-brackets/kyverno-test.yaml b/test/cli/test/jmespath-brackets/kyverno-test.yaml
new file mode 100644
index 0000000000..6e431d745b
--- /dev/null
+++ b/test/cli/test/jmespath-brackets/kyverno-test.yaml
@@ -0,0 +1,36 @@
+name: test-preconditions
+policies:
+  - policy.yaml
+resources:
+  - resources.yaml
+results:
+  - policy: test-jmespath
+    rule: test-jmespath
+    resource: test-valid1
+    kind: Pod
+    status: pass
+  - policy: test-jmespath
+    rule: test-jmespath
+    resource: test-valid2
+    kind: Pod
+    status: pass
+  - policy: test-jmespath
+    rule: test-jmespath
+    resource: test-valid3
+    kind: Pod
+    status: pass
+  - policy: test-jmespath
+    rule: test-jmespath
+    resource: test-invalid
+    kind: Pod
+    status: fail
+  - policy: namespace-validation
+    rule: namespace-validation
+    resource: test-invalid
+    kind: Namespace
+    status: fail
+  - policy: namespace-validation
+    rule: namespace-validation
+    resource: test-valid
+    kind: Namespace
+    status: pass
diff --git a/test/cli/test/jmespath-brackets/policy.yaml b/test/cli/test/jmespath-brackets/policy.yaml
new file mode 100644
index 0000000000..c10e59bf68
--- /dev/null
+++ b/test/cli/test/jmespath-brackets/policy.yaml
@@ -0,0 +1,47 @@
+apiVersion: kyverno.io/v1
+kind: Policy
+metadata:
+  name: test-jmespath
+  annotations:
+    pod-policies.kyverno.io/autogen-controllers: none
+spec:
+  validationFailureAction: enforce
+  background: false
+  rules:
+  - name: test-jmespath
+    match:
+      resources:
+        kinds:
+        - Pod
+    validate:
+      message: 'All pod labels must match except test'
+      deny:
+        conditions:
+          all:
+          - key: '{{ request.object.metadata.labels | merge(@, `{"test": ""}`)}}'
+            operator: NotEquals
+            value:
+              a: "1"
+              test: ""
+---
+apiVersion: kyverno.io/v1
+kind: Policy
+metadata:
+  name: namespace-validation
+  namespace: kyverno
+spec:
+  validationFailureAction: enforce
+  background: false
+  rules:
+  - name: namespace-validation
+    match:
+      resources:
+        kinds:
+        - Namespace
+    validate:
+      message: "For creating a namespace you need to set the objectid of the Azure AD Group that needs access to this namespace as the aadobjectid label"
+      deny:
+        conditions:
+        - key: "{{regex_match('^[a-fA-F0-9]{8}-[a-fA-F0-9]{4}-4[a-fA-F0-9]{3}-[8|9|aA|bB][a-fA-F0-9]{3}-[a-fA-F0-9]{12}$', '{{request.object.metadata.labels.aadobjectid}}')}}"
+          operator: Equals
+          value: false
diff --git a/test/cli/test/jmespath-brackets/resources.yaml b/test/cli/test/jmespath-brackets/resources.yaml
new file mode 100644
index 0000000000..0b286c541c
--- /dev/null
+++ b/test/cli/test/jmespath-brackets/resources.yaml
@@ -0,0 +1,58 @@
+apiVersion: v1
+kind: Pod
+metadata:
+  name: test-valid1
+  labels:
+    a: "1"
+spec:
+  containers:
+  - image: busybox:1.28
+    name: busybox
+---
+apiVersion: v1
+kind: Pod
+metadata:
+  name: test-valid2
+  labels:
+    a: "1"
+    test: "not-equal"
+spec:
+  containers:
+  - image: busybox:1.28
+    name: busybox
+---
+apiVersion: v1
+kind: Pod
+metadata:
+  name: test-valid3
+  labels:
+    a: "1"
+spec:
+  containers:
+  - image: busybox:1.28
+    name: busybox
+---
+apiVersion: v1
+kind: Pod
+metadata:
+  name: test-invalid
+  labels:
+    a: "2"
+spec:
+  containers:
+  - image: busybox:1.28
+    name: busybox
+---
+apiVersion: v1
+kind: Namespace
+metadata:
+  labels:
+    aadobjectid: 51e5fe10-5325-4a32-bce8-7ebe9708
+  name: test-invalid
+---
+apiVersion: v1
+kind: Namespace
+metadata:
+  labels:
+    aadobjectid: 51e5fe10-5325-4a32-9ce8-7ebe97087ebe
+  name: test-valid