NIS 112 billion allocated for defense spending in 2026 budget, Smotrich and Katz agree

Israel’s defense budget for 2026 will stand at NIS 112 billion ($34 billion), following an agreement between Defense Minister Israel Katz and Finance Minister Bezalel Smotrich.

Smotrich had sought a smaller defense budget, around NIS 90 billion, criticizing the defense establishment for inefficiently managing its spending as he unveiled the principles of the 2026 state budget last month, following two years of ballooning war costs. In response, Defense Ministry officials said that Smotrich would be delaying critical deals with a smaller budget.

Meanwhile, the military had initially sought a budget of NIS 140 billion.

Following negotiations between Katz and Smotrich, and between officials at both ministries, the sides agreed on NIS 112 billion, the defense minister’s office says.

According to the agreement, the budget is based on the assumption that only an average of 40,000 reservists will be called up for duty in 2026, “in accordance with the defense minister’s directive to ease the burden on reserve soldiers.”

At the peak of the war, the IDF activated some 300,000 reservists, and was expected to call up some 60,000 during 2026. Katz was set to instruct the army to make various adjustments in light of his decision to reduce the scope of reservists called up in the coming year from 60,000 to 40,000.

In addition, the sides agreed on a package of approximately NIS 725 million, spread over three years, for security measures in the West Bank and on the Jordanian border, Katz’s office adds.