Israel increases 2026 defence budget to $34 billion despite ceasefire in Gaza

Tel Aviv: Israel’s defence budget for 2026 has been set at 112 billion shekels ($34.63 billion), the defence minister’s office said on Friday, up from 90 billion shekels budgeted in an earlier draft.

Defence Minister Israel Katz and Finance Minister Bezalel Smotrich agreed on the defence spending framework as the cabinet has begun debating next year’s budget, which needs to be approved by March or could lead to new elections.

Ministers began what is usually a marathon session on Thursday ahead of a vote that could come early on Friday. If it passes, it heads to parliament for its initial vote.

Katz said the military will continue to address the needs of its soldiers and reduce the burden on reservists.

“We will continue to act decisively to reinforce the IDF (Israeli army) and to fully address the needs of the fighters and to reduce the burden on reservists - in order to ensure the security of the State of Israel on every front,” his office quoted him as saying.

Smotrich’s office said that the 2026 defence budget has seen an increase of 47 billion shekels compared to 2023 on the eve of the war.

Tel Aviv’s brutal war on Gaza has been costly for Israel, which spent $31 billion in 2024 on its war on the Palestinian enclave and Lebanon.

Israel has since entered ceasefire deals with both Hamas in Gaza and Hezbollah in Lebanon.

Meanwhile on Wednesday, Israel said it has launched an airstrike on a Hamas militant in southern Gaza in retaliation for an attack that wounded five Israeli soldiers.

The strike late Wednesday was the latest test for a fragile ceasefire that has mostly held up since early October, despite claims of violations by both Israel and Hamas. Hamas put out a statement condemning the strike in Khan Younis.

Earlier Wednesday, Israel received remains of what could be one of the last hostages in Gaza and said it would begin allowing Palestinians to leave the war-torn territory through a border crossing with Egypt.

Prime Minister Benjamin Netanyahu said Hamas violated the ceasefire Wednesday when, according to the

army, militants emerged from an underground tunnel and attacked

Israeli soldiers in an area under their control.

Israel has accused Hamas of ceasefire violations before launching previous waves of airstrikes. Strikes killed 104 people in late October and 33 people in late November, according to local health officials.