By Anjali Sharma
WASHINGTON – Israel’s Defence Ministry on Wednesday has proposed a record defence budget of 144 billion shekels (USD 45 billion) for 2026 as the country seeks to rebuild and strengthen its military after the end of 3 year-long war with Hamas terrorists in Gaza.
The budget — one of the largest in Israel’s history will be supplemented by the long-delayed delivery of USD 3.8 billion worth of security funds from the US, which had been bogged down and delayed significantly due to Washington’s recent government shutdown, Calcalist, an Israeli daily reported.
The ministry is also requesting an additional 37 billion shekels (USD 9.8 billion) for the reserve forces budget, which would fund the recruitment and training of thousands of reservists across all sectors next year.
Defence officials estimated that 60,000 to 70,000 reservists will be called up in 2026 to address what they describe as an “urgent manpower gap” caused by the government’s failure to extend mandatory military service.
The Israel Defence Forces face an annual shortfall of 12,000 soldiers, most of them in combat units.
Israeli officials warned that without additional recruitment, Israel could struggle to maintain operational readiness amid its ongoing tensions with Iran, and with its proxy terror groups in Gaza and Lebanon.
In addition to the core defence and reserve budgets, the ministry is seeking 7 billion shekels (USD 1.9 billion) to strengthen preparedness against Iran, which has accelerated its arms purchases from China and other countries while expanding its ballistic missile programme and holding large-scale military drills.
The proposal came 6 months after the 12-day war in June, during which Israel and the US launched coordinated strikes on Iran’s nuclear and missile facilities.
Israeli intelligence officials believe Tehran is now working to restore its production and launch capabilities at an unprecedented pace.
The scale of the proposed budget has sparked a major dispute between the Defence Ministry and the Finance Ministry, which has refused to approve the directive, arguing that it exceeds the approved spending framework.
Finance Minister Hashal Rotenberg has ordered a temporary halt on new defence contracts “until a professional review is completed and budgetary priorities are set,” according to a statement from the Treasury.
The ministry said it aims to ensure that “the level of financial activity of the Defence Ministry is brought into line with its budget.”
Defence Ministry Director General Maj. Gen. (res.) Amir Baram strongly criticised the freeze, accused the Treasury of “blocking dozens of critical deals worth billions” that are needed to restore the IDF’s combat readiness.
These deals include spare parts for tanks, new drones for ground units and protection systems for communities near the Gaza and Lebanon borders.
Baram said the delays were undermining national security.
“The focus of our enemies’ efforts requires Israel to invest now in massive resupply and rapid recovery. We must restore the fighting forces worn down during the war to full capacity,” he warned.
He also said contracts for the construction of a new barrier along the Jordanian border were being held up “in defiance of the Ministerial Committee’s decision and despite the clear emergence of new threats.”
The Defence Ministry cautioned that prolonging its budgetary disputes with the Treasury will lead to a significant delay in many of the IDF’s key procurement programmes, and research initiatives, left Israel greatly exposed at a time of growing regional instability in a highly hostile environment.
