By Dave Bender
JERUSALEM, Sept. 13 (Xinhua) -- An Israli Knesset (parliament) committee ruled to allocate an extra 500 million shekels (126.7 million U.S. dollars) to the Israeli army's 2012 budget, according the Jerusalem Post on Thursday
Israeli Finance Committee's decision raised the total sum to about 60.3 billion shekels (15.2 million U.S. dollars), the Jerusalem Post said.
The boost comes in the wake of extensive - and often acrimonious - "guns or butter" debates in recent months between the Finance and Defense ministries on competing demands for greater funding, on one hand, and belt-tightening cutbacks on the other.
In January, the government recommended boosting the annual budget by 76 million U.S. dollars(3 billion shekels), in a yet-to- be approved increase by the Knesset Finance Committee.
A Defense Ministry official, however, told The Jerusalem Post that they still hope to receive the remainder - 2.5 billion shekels - by the end of the year, after the committee overruled a Finance Ministry call to cancel the additional funds.
In mid-August, Prime Minister Benjamin Netanyahu told a Cabinet session that the budget should take into account the threats Israel is currently facing and will have to face in the near future, in addition to an unstable economic situation, both locally and regionally.
"The threats directed at the State of Israel are changing and we need to be prepared for that," Netanyahu said.
"We need to ensure that the security Israeli citizens have enjoyed in the past three-and-a-half years continues through the changing conditions."
A final discussion is set for September 17, after the Jewish New Year (Rosh Hashana) holiday.
Netanyahu and Finance Minister Yuval Steinitz both doubt they have enough support to pass on further cuts on the ministries' budgets and are afraid of a public backlash against the cuts, part of austerity measures taken to reduce the burgeoning deficit.
The main issue at hand is how to squeeze between 13 billion shekels (3.23 billion U.S. dollars) and 15 billion shekels (3.73 billion U.S. dollars) cuts in the ministries' spending next year.
Budget talks usually take place in July and the cabinet members vote on the proposed package in August. This is the first delay of its kind in more than a decade.
The Israel Defense Forces (IDF) says its annual budget requires a significant supplement in order to adequately defend the country 's western border with Egypt against rising militant attacks, and prepare for a future of uncertainty in relations with Cairo.
The ouster of former Egyptian President Hosni Mubarak early last year has forced the IDF army to allocate more personnel and hardware to the border to defend against increasing violence originating in Sinai Peninsula.
Israel contends it can cope with intermittent rocket attacks and cross-border attacks launched by militants from Sinai, but the security establishment here is reportedly losing sleep in the wake of the Muslim Brotherhood's Mohamed Morsi's developing control over once - military-controlled sectors of the Egyptian government.
Morsi's statements saying Egypt would uphold its international agreements, a reference, inter alia, to the 1979 peace treaty with Israel, has done little to calm military planners here.
The army said it needs 15 billion shekels (about 3.8 billion U. S. dollars) over the next five years in order to revamp its deployment on the Egyptian front, the local Ma'ariv newspaper reported.
Plans that were drawn up prior to Morsi's victory call for bolstering the border with new weapon systems, electronic surveillance measures, ground monitoring stations, intelligence assets and personnel, including reserve forces.
Presently, a 11.5 billion shekels (3.5 billion U.S. dollars) gap exists between the Defense and Finance ministries budget recommendations.
"This is a discussion about budget priorities, not only between the security budget and other ministries' budgets, but also within the security budget itself," Netanyahu told the assembled ministers.
"We are about to make some tough decisions about the budget's size. This is a complex and serious debate, with ramifications for the next decade," he said.
Defense Ministry sources told the Ynet news website that the army had succeeded in saving nearly 10 billion shekels (2.5 billion U.S. dollars) since 2008, as part of a series of cost- cutting measures.
The cutbacks are part of the Brodet Committee's recommendations, submitted in the wake of the 2006 war against Hezbollah in Lebanon.
The measures are aimed at cutting defense spending by 10 billion shekels over the next five years and by 20 billion by the following decade.
However, Finance Ministry sources, told the Walla news website that duplication and excesses are still rife among different defense bodies.
"There's still a lot to cut out, and the defense echelon hasn't really progressed," the source said.
"There are whole parts of the Israeli army that have not become more efficient, and therefore it 's time to cut this money, which is needed like oxygen in other parts of the Israeli economy," the sources said.
In response, army officials shot back that the treasury is trying to unfairly manipulate the public's perceptions of the debate.
IDF Chief of Staff, Lt.-Gen. Benny Gantz, hopes to advance several planned projects, including manufacturing more Merkava battle tanks, acquiring the "Windbreaker" anti-tank rocket defense system, developing new unmanned transport vehicles, and purchasing American F-35 stealth fighter jets.