Defense Minister Amir Peretz is expected to make a final decision at the end of the month on which rocket defense system the Israel Defense Forces will procure.

Peretz and senior defense officials are weighing four possible options, some of which are still being developed, to solve the problem of rockets like the Katyushas and the Qassams.

Four manufacturers, two Israeli and two American, are competing for the tender: Israel Aircraft Industries and Rafael; Lockheed Martin and Northrop Grumman.

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The final decision may select two different, but complementary systems, each dealing with a different type of threat.

Also toward the end of the month, the IDF is planning to present Peretz with its new operational plans for a possible war scenario in the North. The plans will be updated versions of an existing plan, "Mei Merom," which was prepared before the outbreak of the second Lebanon war but was never fully implemented.

The updated plans will incorporate the lessons of the last war.

During the second half of the year, the IDF is expected to hold a major General Staff exercise to test the new plans.

Just like a similar exercise a year ago, the exercise will focus on a war scenario on the northern front.

One of the issues that the IDF and Defense Ministry officials are currently working on are amendments to the Law on Reserve Duty. Work on changes to the law began before the war in Lebanon, but was put on hold since July 2006.

The IDF intends to ask for changes to the law that would allow it to call up reservists for more frequent and intensive training. The army also plans to ask for an increase in the compensation reservists receive for lost work days.

Another option recently considered is to raise the maximum age for reserve duty, which was lowered to 40, but it is doubtful that such a proposal will pass.

Following extensive deliberations between the finance and defense ministries, it was decided to postpone the implementation of the Ben-Bassat committee proposals, which called for shortening the length of mandatory military service for men.

Instead of cutting the period of service by four months, starting with those conscripted in August 2004, as the Ben-Bassat committee proposed, an immediate freeze on changes will go into effect.

By April, the two sides are meant to reach a final decision on this issue.

IDF officials believe it will not be possible to avoid a further delay to the implementation of the cut for at least two to three more years.

Meanwhile, the Defense Ministry has decided to allot NIS 9.4 billion over a 30-month period to bring the level of equipment, arms and ammunition stores of the IDF down to pre-war levels.

Of this sum, NIS 8.2 billion will come out of a budget received for this purpose, while the remaining NIS 1.2 billion will come from diverting funds from other parts of the defense budget.