The IDF and Defense Ministry are preparing a joint plan to purchase NIS 130 billion in military aircraft, munitions, and factories following Prime Minister Benjamin Netanyahu's December 2025 approval of a NIS 350 billion increase in the defense budget, Walla learned on Sunday.
The multi-year framework is designed to strengthen the defense establishment’s self-reliance, against the backdrop of embargos in various fields.
For unclear reasons, the Finance Ministry spent the past few months making no progress on the issue, arguing that the budget could not be transferred to implement the multi-year plan because the defense budget base for future years had not yet been agreed.
"The defense establishment’s budget base is very high, and there is not enough money for everything," the Finance Ministry said.
This comes as senior IDF officials say this is a critical process for building the IDF’s strength over the next 10 years. The sides entered a three-month series of talks over the defense budget base, but the gaps between them remained the same, and in some areas even grew, even after they enlisted outside advisers and experts in an attempt to reach a compromise.
At the same time, the IDF’s missions expanded in the Gaza Strip, Syria and Lebanon, forcing it to mobilize tens of thousands of reservists, peaking at more than 100,000 personnel.
According to sources in the IDF Planning Directorate, this created a total budget gap of NIS 40 billion. That figure, the IDF said, became another obstacle in negotiations among the Finance Ministry, the Defense Ministry, and the IDF, which are struggling to balance operational demands with manpower shortages in the regular army, the standing army, and the reserves.
Finance Ministry proposes defense budget cuts
The Finance Ministry began discussing 35,000 reservists and tried to force the IDF to manage risks across multiple fronts.
The ministry also proposed cutting the budget to NIS 115 billion over a decade. Walla has learned that the IDF, the Defense Ministry, and the National Security Council also agreed to compromise on that figure, while all the armies of the Middle East and Europe were significantly increasing their defense budgets.
Pressure in the defense establishment grew alongside concrete shortages, and the Finance Ministry proposed agreeing first on 2026, then 2027, and only afterward on subsequent years. The Defense Ministry and the IDF were willing to compromise on the size of the budget, as long as they could move forward and promote long-term deals, and signal to Israeli industries to open new production lines that require major investment and hiring.
At the same time, the Planning Directorate insisted on approval for stable reserve mobilization, at least 50,000 reservists a year, amid the government’s failure to decide on extending compulsory service.
The Defense Ministry eventually agreed to the 2026 budget without discussing or deciding on the budget for the coming decade. At that stage, the accountant general entered the picture and reshuffled the cards, identifying the defense establishment and IDF budget gap as the main obstacle to progress.
NIS 40 billion 'budget gap' to be reduced
In the end, it was decided that the NIS 40 billion "budget gap" would be reduced in two phases: an immediate NIS 15 billion and an additional NIS 25 billion, subject to performance over the rest of the year. Above this decision, defense and National Security Council chiefs scored a major achievement, after Netanyahu gave the green light to enter into contracts with industries starting in 2026 for a huge sum of NIS 130 billion out of the NIS 350 billion.
The move will accelerate the establishment of factories and infrastructure to produce ammunition and weapons systems, as well as restore the ground forces to readiness levels that existed before October 7. On the agenda are more fighter jets, refueling aircraft, attack helicopters, naval vessels, armored vehicles, advanced weapons production, and a space project.
The Defense Ministry and the IDF will present the government with the plan next week to implement the NIS 130 billion over the coming years, and it will ultimately be approved by the ministerial committee. Walla has learned that the framework has already been set, approved by Defense Minister Israel Katz and advanced in line with policy by Defense Ministry Director-General Maj.-Gen. (res.) Amir Baram.