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Israel is preparing a NIS 130 billion ($38 billion) military modernization programme that includes the purchase of advanced aircraft, expanded weapons production and the construction of new munitions factories as part of a broader long-term defence strategy, according to local media reports.
The multi-year plan, jointly drafted by the Israel Defense Forces and the Ministry of Defense, follows Prime Minister Benjamin Netanyahu’s approval in December 2025 of a NIS 350 billion increase in the country’s defence budget over the coming decade.
The programme aims to strengthen Israel’s military capabilities and reduce dependence on foreign suppliers amid growing international restrictions on arms exports, according to the report.
The proposed investment covers new fighter jets, aerial refuelling aircraft, attack helicopters, naval vessels, armoured vehicles, advanced weapons manufacturing facilities and a space programme. It also includes plans to establish new factories and production lines for ammunition and other military equipment to boost domestic defence production.
The initiative is intended to restore the military’s readiness following the October 7, 2023 attacks and support the armed forces’ growing operational commitments in Gaza Strip, Syria and Lebanon.
However, disagreements between the Defence Ministry and the Finance Ministry have delayed implementation of the plan. The Finance Ministry has argued that long-term funding cannot be allocated until a permanent defence budget framework is approved.
According to Israeli media, the military estimates it faces a NIS 40 billion funding gap due to expanded operations and the mobilisation of tens of thousands of reservists, which at times exceeded 100,000 personnel.
The Finance Ministry reportedly proposed reducing the long-term defence allocation to NIS 115 billion, while defence officials insisted that stable funding was essential to sign long-term procurement contracts and allow Israeli defence companies to expand production capacity.
Following months of negotiations, officials agreed to narrow the budget gap in two phases, with an immediate NIS 15 billion allocation and a further NIS 25 billion subject to future budget performance.
The reported breakthrough allows the Defence Ministry to begin signing contracts worth NIS 130 billion from 2026, paving the way for major procurement projects and expanded domestic weapons production.
The Defence Ministry and the IDF are expected to present the full plan to the Israeli government next week for formal approval. Source: Jerusalem Post
