Israel Approves $130 Billion Defense Build-Up Plan Including Aircraft and Munitions Production
The Israel Defense Forces (IDF) and Shin Bet recently eliminated the commander of Hamas's Yibna Battalion in the Rafah Brigade. Meanwhile, the Israeli government is preparing to implement a multi-year defense strengthening plan following Prime Minister Benjamin Netanyahu's agreement last December to allocate a 350 billion shekel budget to the defense sector by 2025.
The Ministry of Defense and the IDF have collaborated to develop a program focused on purchasing aircraft, munitions, and establishing factories and production lines to ensure defense system independence amid ongoing embargoes. However, the Ministry of Finance has delayed progress, citing the absence of an agreed-upon defense budget baseline for future years and stating that the defense budget is already very high.
Despite three months of negotiations involving external consultants, significant gaps remain between the Ministry of Finance and the defense establishment regarding budget allocations. The IDF faces a 40 billion shekel budget shortfall, compounded by expanded military operations in Gaza, Syria, and Lebanon, which have required mobilizing over 100,000 reservists at peak times.
The Ministry of Finance proposed reducing the budget to 115 billion shekels over ten years and limiting reservist mobilization to 35,000 soldiers annually, pressuring the IDF to accept operational risks. The defense establishment agreed to compromise on the budget figure to advance long-term contracts and signal Israeli industries to open new production lines requiring substantial investment and workforce recruitment.
Ultimately, the defense budget shortfall will be addressed in two phases: an immediate 15 billion shekel injection and a subsequent 25 billion shekel installment contingent on performance. Prime Minister Netanyahu has authorized contracts worth 130 billion shekels starting in 2026, accelerating the construction of munitions factories, restoring ground forces' readiness to pre-October 7 levels, and acquiring additional combat aircraft, refueling planes, attack helicopters, naval vessels, armored vehicles, advanced weaponry, and space projects.
The Ministry of Defense and IDF will present the detailed plan to the government next week for final approval by the ministerial committee. The framework has been approved by Defense Minister Israel Katz and advanced under the guidance of Ministry Director-General Amir Baram.
