Finance Ministry officials expect the security establishment to demand another billion shekels due to the current flare-up in the south, but say they plan to reject any proposals for raising the defense budget.

Defense officials made similar demands when unrest broke out in Egypt earlier this year.

The defense budget for 2011 is NIS 54.2 billion, and increases to NIS 55.8 billion in 2012. In 2010 it was NIS 53.2 billion.

Despite the declarations by Finance Minister Yuval Steinitz that the defense budget for 2011 and 2012 was cut by NIS 2.7 billion, these budgets keep increasing. After they were initially approved in August 2010, Prime Minister Benjamin Netanyahu promised Defense Minister Ehud Barak an extra NIS 5 billion for 2011, part of which his ministry received at the end of 2010.

Meanwhile, the defense establishment is waiting for the approval of the U.S. budget, which is expected to include another $205 million earmarked to help Israel acquire more Iron Dome missile defense systems.