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The security cabinet decided yesterday to let the NIS 480 million cut in the defense budget stand. The cut was part of the NIS 1.3 billion in budget cutbacks approved by the full cabinet on Sunday.

The security cabinet requested that Defense Minister Ehud Barak and Finance Minister Roni Bar-On meet in the coming days to determine how to work out an agreement on the matter. However, treasury officials seem to feel that the chances of the two sides reaching a compromise are slim. In the end, they expect the matter to be brought to Prime Minister Ehud Olmert for a decision as part of the debate concerning the 2008 budget.

Yesterday's discussion came after Barak appealed Sunday?s cabinet decision. The defense establishment came out in full force for the meeting.

In addition, reporters were also briefed on the matter, while the treasury kept a low profile.

In Wednesday's meeting, the ministers listened to overviews given by Israel Defense Forces Chief of Staff Gabi Ashkenazi regarding the IDF budget issues and difficulties and dangers that would arise should the proposed NIS 480 million be cut from the defense budget. The IDF claims reservists' training would be cut and IDF readiness would be harmed.

In response, the treasury said the cut would be used to finance other critical defense interests such as the Mossad budget, protecting the population living near Gaza, as well as other national priorities such as education and strengthening the North.

One of the ministers defined Ashkenazi?s overview as ?chilling. The cabinet was also presented with an overview of the Brodet Commission's final report, charged with reviewing the defense budget, but did not discuss the matter due to a lack of time.

The commission's report constitutes the most comprehensive ever publicized on the functioning of the IDF, its structure and budget, with particularly harsh criticism of the way in which the IDF and the Defense Ministry handled military and budgetary business to date.

The committee is headed by David Brodet, former treasury director general and head of the budgets department. Brodet presented the cabinet with a plan to increase the defense budget, including a changeover to a five-year budget plan and a budget increase of NIS 46 billion over a decade. In addition, Brodet introduced a comprehensive economic management plan to rehabilitate the Defense Ministry.