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Photo: Flash 90

Israeli Ministries in Battle Over Billions in War Funding

Marni Harow

Editor: Marni Harow

4 Tishrei 5787 (15.09.26)

As Israel heads into elections, the Defense and Finance ministries are locked in a bitter fight over billions in military funding—with only Netanyahu able to break the deadlock.


C14’s Noam Amir reports that as a war of revival continues across multiple fronts and the IDF has already begun a process of rehabilitation and preparing for its future needs, a renewed dispute is threatening to disrupt that work, according to the Defense Ministry. At the heart of the clash is a funding source for billions of shekels demanded by the Defense Ministry—money the Finance Ministry is in no hurry to release.

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Finance Minister Smotrich | Photo: Jonathan Zindel, Flash 90

The Defense Ministry and IDF argue that Israel’s new security reality requires enormous investment in force buildup, procurement and military rehabilitation. Just last March, the government approved an increase of more than NIS 30 billion, but the money has yet to reach the Defense Ministry, which says the IDF’s buildup has now stalled. Against the backdrop of Israel’s purchase of new heavy-lift helicopters intended to replace the aging and worn-out Yasur fleet, Defense Ministry officials warn that without payment for the procurement, the Americans could move the production line to another military, pushing Israel to the back of the queue.

The Finance Ministry, meanwhile, argues that the IDF and Defense Ministry are exploiting the complex security situation and the election period to generate political pressure against Finance Minister Bezalel Smotrich. Treasury officials say Smotrich managed the state budget responsibly through one of Israel’s most challenging periods, pointing to interest-rate cuts in recent months as evidence that the government has maintained its budgetary framework.

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Photo: Jonathan Zindel, Flash 90

A Finance Ministry official told C14 on Tuesday: “The Defense Ministry and the IDF must not turn this dispute into an election carnival. These are sensitive and important issues, but at the same time, we are not prepared to turn the state budget into a tool in their hands without the oversight required by law, certainly not during an election period.” The comments come despite repeated warnings from Defense Ministry Director-General Amir Baram, who has rejected the Finance Ministry’s claims. The Defense Ministry argues that the IDF of 2026 cannot be run according to the budgetary assumptions of Israel before Oct. 7. “The war changed Israel’s security needs, the scale of reserve service, ammunition stockpiles and procurement requirements,” officials said. The warning comes as the defense establishment cautioned just this weekend that Iran is close to renewing hostilities.

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Israel Katz | Photo: Avshalom Shoshani, Flash90

Against the backdrop of the destruction of the Ali Taher Ridge, IDF officials say Hezbollah is looking for a way to return to the fight. “We need reservists, we need munitions and we need spare parts—and that does not include the force-buildup and training budget, which is critical to maintaining the military’s readiness.”

As in previous disputes, Prime Minister Benjamin Netanyahu will ultimately have to decide. Netanyahu met with opposition leader Yair Lapid Monday night and asked for opposition support to reopen the budget during the election period. Lapid, as he has in the past, turned the issue into a political confrontation and demanded that Netanyahu instead take the money from coalition funds allocated to the ultra-Orthodox parties. Once again, Lapid demonstrated that when it comes to leadership and Israel’s national security, he prefers the irresponsible refuge of political maneuvering.