Israel raises 2026 defence budget to $34.63B amid cabinet debate

Israel’s defence budget for 2026 has been set at 112 billion shekels ($34.63 billion), the Defence Ministry announced on Friday, marking a significant increase from the 90 billion shekels outlined in an earlier draft.

The agreement, reached between Defence Minister Israel Katz and Finance Minister Bezalel Smotrich, comes as the cabinet enters intense deliberations over next year’s national budget — a process that must conclude by March to avoid the possibility of new elections.

Ministers launched what is typically a marathon budget session on Thursday, with discussions expected to stretch into early Friday ahead of a key cabinet vote. Should the budget pass this stage, it will move to the Knesset for its first parliamentary reading.

The expanded defence allocation reflects heightened security demands and ongoing military operations. Katz said the Israel Defense Forces (IDF) would continue to prioritise the needs of frontline soldiers while working to ease the heavy reliance on reservists, who have shouldered an increased operational burden over the past year.

The 2026 budget debate comes against a backdrop of persistent regional tensions and political divisions within Israel’s governing coalition, raising the stakes for a spending plan that could determine the government’s stability in the months ahead.