Israeli Defense Ministry Demands Major Budget Increase for 2026 Amid Treasury Dispute

The Israeli Defense Ministry and the IDF are engaged in a sharp conflict with the Finance Ministry over the 2026 budget agreement. The defense establishment is demanding an additional 40-45 billion shekels, which would raise the defense budget to between 183 and 188 billion shekels, up from the original 112 billion shekels. According to a report by N12, the defense system warns that the lack of a budget agreement is already causing significant harm to military operations. This includes halted purchases of spare parts for tanks and other land platforms, likely including armored personnel carriers such as the Namer and Eitan, as well as naval equipment. The report also states that a large number of operational military systems have been decommissioned and cannot be reactivated.

Furthermore, construction of outposts and bases in the Gaza Strip's "yellow lines" area and southern Lebanon has been frozen, impacting soldiers' ability to operate and defend themselves there. Without a timely budget agreement, production lines for artillery shells will be shut down, reservists may be released against operational needs, and future procurement from the United States will be impossible.

Earlier, Amir Baram, the Defense Ministry Director-General and retired general, sharply criticized the Finance Ministry at the Herzliya Conference. He warned that Israel's long-term military strength is dangerously lagging and accused the Finance Ministry's Budget Department of treating the military's wartime needs as a mere accounting issue, undermining government decisions on long-term force building.

In response, senior Finance Ministry officials rejected these claims, accusing the defense establishment of budget overruns. They stated that the defense system has already received an unprecedented budget of 143 billion shekels approved by the government and Knesset. They claimed the defense sector exceeded this increased budget by tens of billions illegally. They also criticized the IDF for cutting back on tanks and outpost construction despite the large budget, calling it a serious management problem. The Finance Ministry warned that refusal to implement basic budget controls forces Israel to pay a heavy price through tax hikes and cuts in education, health, and welfare without effective results.