Israel Approves Multi-Billion Shekel Defense Budget Deal Amid Ongoing Conflict

The dispute between Israel's Defense Ministry and the Finance Ministry over increasing the defense budget amid ongoing hostilities has been resolved following Prime Minister Benjamin Netanyahu's approval of a framework led by the National Security Council. The agreement, reached after joint discussions between finance and defense officials, includes an immediate transfer of approximately 12 billion shekels to the Defense Ministry, with an additional 3 billion shekels to be provided by the end of the year. This is alongside the already set 2026 defense budget of about 143 billion shekels.

Furthermore, the Defense Ministry will receive another 25 billion shekels by year-end in two installments scheduled for October and November. These transfers will depend on ongoing assessments of the Israel Defense Forces' (IDF) actual needs and adherence to budget execution forecasts. A joint monitoring mechanism between the Finance and Defense Ministries will oversee defense spending and ensure alignment with operational requirements.

The budgetary dispute arose in recent months due to unforeseen security developments not accounted for in the original plans, including ongoing conflict with Iran, tensions in Lebanon, expanded reserve troop mobilizations, and the need to replenish depleted ammunition, interceptors, and other combat equipment.

In addition to immediate budget agreements, the parties reached understandings on the IDF's multi-year strengthening plan, estimated at around 350 billion shekels over the next decade. Under this plan, the Defense Ministry is expected to receive an annual budget increase of about 10 billion shekels. The existing procurement deal for two squadrons of F-15IA and F-35I “Adir” fighter jets, valued at approximately 40 billion shekels, remains intact. These aircraft will gradually replace older models in the Air Force over the coming decade without expanding its current force size.