Prime Minister Ehud Olmert appears inclined to support increasing the 2007 defense budget, based on his statements at a meeting on Thursday.

The Defense Ministry has demanded another NIS 3 billion, and at Thursday's meeting, Olmert told Israel Defense Forces Chief of Staff Dan Halutz, Finance Minister Abraham Hirchson, Defense Minister Amir Peretz and senior officials from both ministries that "the resources available to the defense establishment and its needs must be reviewed" over the coming weeks.

Olmert announced that a committee will be appointed to review the defense budget's scope and composition.

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The committee will include members of the National Security Council and of the economic forum headed by Professor Manuel Trachtenberg.

Olmert emphasized that until the committee completes its work, efforts will be made to find pinpoint financial solutions for the defense establishment's immediate needs within existing macroeconomic limitations.

Hirchson emphasized that any additional defense funding must not expand the total budget.

Economic officials believe that increasing the 2007 defense budget will mandate budget cuts in other areas or alternative revenue sources.

The defense establishment would like to shift to a multiyear budget that would enable it to prioritize resources.