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Prime Minister Benjamin Netanyahu's handling of the budget talks was lambasted Tuesday by officials from the defense and finance ministries. As of press time Tuesday night, the cabinet was still debating the proposed budget for 2009-2010. If the ministers approve it, it will be sent on to the Knesset.

Local authorities, meanwhile, are unhappy with proposed cuts to the education budget, and have declared a one-day strike Wednesday in most locales. The strike will shut down schools and municipal offices and suspend garbage collection.

At Tuesday's cabinet meeting, Israel Defense Forces Chief of Staff Gabi Ashkenazi erupted over a treasury proposal to raise the retirement age for career noncombat officers. "Career officers are not contract laborers!" he shouted.

"That language is unacceptable to me," said a clearly upset Netanyahu. Ashkenazi retorted: "So don't accept it!"

According to IDF sources, Ashkenazi's anger stemmed from the fact that he, Netanyahu and Defense Minister Ehud Barak had agreed Monday night that the retirement proposal would not be discussed at the cabinet meeting, but would instead be handled by a special committee considering other changes in officers' employment terms. But treasury officials raised the issue at Tuesday's meeting, sparking Ashkenazi's protest of what he termed a violation of the agreement.

At some point during the ensuing argument, it emerged that Finance Minister Yuval Steinitz had never been informed of Monday's agreement. At that point, he and Ashkenazi left the room to discuss the matter privately.

When they returned, Steinitz said the dispute had been ironed out, and that he and Ashkenazi both apologized for their raised voices.

But a new monkey wrench was thrown into the debate when Attorney General Menachem Mazuz said it was not legally possible to unilaterally raise officers' retirement age, because this would violate the commitment the state and the army had made when hiring them.

The cabinet decided that the issue should be discussed between finance and defense officials as part of a long-term process of reforming the IDF's employment terms.

Defense officials later charged the treasury with handling the issue in an unprofessional manner.

Treasury officials, for their part, were horrified over agreements that Netanyahu had reached with Histadrut labor federation chairman Ofer Eini, including one proposal to unionize police officers and prison guards and another to reduce the treasury's ability to monitor public-sector pay excesses.