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The Israel Defense Forces will have to halt training in April as a result of a NIS 3 billion budgetary deficit, Deputy Chief of General Staff Maj. Gen. Yair Naveh told MKs Monday. The shortfall will lead to cutbacks in weapons acquisition and training, said Naveh, as well as the possible loss of 2,000 jobs in factories in outlying towns where Merkava tank components are made, according to manufacturers.

"The IDF has no orderly budget plan for 2012. The IDF is living from hand to mouth," Naveh told the Knesset Foreign Affairs and Defense Committee meeting Monday, adding that the defense establishment's budget has not grown in real terms over last year. "Even after we've cut into the IDF's flesh, we are still missing some NIS 3 billion," he said. "We've informed the government that as of April we must stop training.

The committee was told that 40 percent of the factories supplying components of the Merkava tank are in outlying towns, and that these firms had gotten no orders from the defense establishment in more than five months.

Representatives of these manufacturers said that if this trend continues, some 2,000 workers could lose their jobs.

Naveh replied that as far as the IDF was concerned, "Our preference is to do all that we can in the outlying owns. In any future front the IDF will need to operate its armor and not just rely on lightning strikes."

Naveh presented a list of significant projects that were being affected by the budget cuts. He said the IDF was holding off on purchasing two more Iron Dome batteries and that there was going to be a delay in equipping the Arrow-3 system, among other things.

Committee chairman Shaul Mofaz decried the slowdown in the Merkava tank project. "The decision to freeze the processes in the periphery factories is bad judgment that will cause a shock in the technological, social and defense realms," he said.