IDF to cut back on border defenses amid budget dispute

IDF warns border deployments face immediate cuts as budget dispute deepens.

By World Israel News Staff

The IDF has warned Israel’s political leadership that it will immediately reduce reserve-force deployments along the country’s borders unless the Finance Ministry releases billions of shekels promised to the defense establishment, escalating a long-running dispute over the cost of Israel’s expanding military commitments.

IDF Deputy Chief of Staff Maj. Gen. Tamir Yadai issued the warning Sunday in a letter detailing the “grave implications for the IDF’s force posture in the absence of a budget agreement,” according to Israel Hayom, which obtained the document.

The measures outlined by Yadai include another reduction in the deployment of reservists, leaving fewer troops stationed along Israel’s borders and in communities protected through the military’s regional defense system. Operational details about the planned reductions were withheld for security reasons.

The IDF also plans to suspend programs intended to restore units to full operational readiness, delay investments in active-duty and reserve personnel and freeze recruitment into the career military. Defense officials warned that those steps would make it more difficult to prepare forces for another large-scale war while worsening an existing manpower shortage.

Yadai’s letter was forwarded without changes by IDF Chief of Staff Lt. Gen. Eyal Zamir to Defense Minister Israel Katz. Zamir added that the failure to reach a budget agreement and implement Prime Minister Benjamin Netanyahu’s instructions was already damaging the military’s capabilities and readiness. Katz then transmitted the warning to Netanyahu and the head of the National Security Council.

The latest confrontation centers on a defense establishment claim that the IDF faces a roughly 40 billion shekel funding gap created by Operation Roaring Lion and the deployment of Israeli forces in a security zone in southern Lebanon — expenses that were not included in the original 2026 budget.

After the Defense and Finance ministries failed to agree on how to cover the shortfall, Netanyahu intervened in late June and recognized the additional expenses. He instructed the Finance Ministry to transfer 12 billion shekels immediately, with additional funding to be provided later in the year.

More than a month later, the IDF says none of the initial 12 billion shekels has arrived.

Defense officials also say they have not received authority to make long-term procurement commitments valued at approximately 130 billion shekels, part of a broader multiyear plan to rebuild weapons stocks, expand domestic production and prepare for future conflicts.

“This is the height of absurdity. There are serious shortfalls here,” a source familiar with the dispute told Israel Hayom.

The source warned that without funding, Israeli defense companies cannot establish a reliable production schedule, domestic ammunition-manufacturing capacity cannot be preserved and the IDF cannot adequately prepare for another confrontation with Iran.

The dispute had already prompted warnings from Knesset Foreign Affairs and Defense Committee Chairman Boaz Bismuth, who wrote to Finance Minister Bezalel Smotrich in July demanding implementation of the government’s decisions.

Bismuth said the delay was causing “real harm” to military readiness, stockpile replenishment and weapons procurement. He also warned that Israel could lose positions on international production lines for critical weapons systems, raising future costs and delaying deliveries.

“I call for the decisions of the Knesset and the prime minister to be implemented immediately,” Bismuth wrote.

According to Bismuth, the defense budget approved by the relevant Knesset committee totaled 143 billion shekels. The figure was significantly higher than the 112 billion shekel framework approved by the cabinet in December, before the latest escalation and the resulting increase in operational costs.

Israel’s final 2026 budget, passed by the Knesset in March, increased Defense Ministry spending by approximately 20% as fighting with Iran continued. The overall state budget was Israel’s largest ever and passed by a 62-55 vote.

The IDF nevertheless says the approved defense allocation does not cover military operations that expanded after the budget was prepared. It reportedly exhausted the readily available funds for some activities in early May and began freezing emergency procurement, construction of military positions and efforts to return units to full readiness.

Yadai issued an earlier warning at the end of June, saying the military was operating under a budget that no longer reflected Israel’s security reality.

“This is not a budgetary difficulty,” the document said, but a problem causing “direct harm” to the implementation of wartime lessons and preparations for a prolonged, multi-front conflict.

The IDF had already slowed equipment purchases, postponed contracts, reduced training programs and frozen spending not considered immediately essential, according to the earlier document. Yadai warned that the accumulated effect was damaging the military’s ability to maintain its current force posture.

The Finance Ministry has disputed the defense establishment’s portrayal of the crisis.

Responding to Bismuth’s earlier letter, Smotrich said the ministry was processing the necessary budget requests according to law and maintained that the timing of the transfer was not preventing the Defense Ministry from replenishing ammunition or completing weapons purchases. He accused the Defense Ministry of repeatedly exceeding its approved budget.

Finance Ministry officials told Israel Hayom last week that the transfer would be completed within days and said the administrative preparations were ready. The promised period passed without the funds reaching the Defense Ministry, according to the report.

When the initial 2026 framework was announced, Smotrich said the government was allocating “a huge budget to strengthen the army” while also attempting to restore economic growth and provide relief to citizens. Katz said the funding was intended to reinforce the IDF, meet the needs of troops and reduce the burden on reservists.