Military Intelligence Directorate Recommends Stepping Up Attacks on the Iranians in Syria — A Different View

Shmuel Even

INSS Insight No. 1259, February 13, 2020

The probability of an outbreak of war as a result of deterioration and escalation is not low and also depends on Israel—that is the implication of the annual intelligence assessment of the Military Intelligence Directorate (MID). Nevertheless, the MID’s recommendation to the government is to increase IDF attacks against Iranian forces in Syria, in order to exploit the elimination of Soleimani to drive them out of the country. This article analyzes the recommendation and reaches a different conclusion: Israel must not increase its attacks on the Iranians in Syria, beyond what is necessary for its clearly strategic needs, such as countering the supply of strategic weapons and thwarting Iran’s military entrenchment, which could endanger Israel. The risks of moving up a level—to a military struggle and even all-out war on the Iranian military presence in Syria, as implied by the MID recommendation—are far greater than any possible benefits and the struggle should be conducted in the political arena.

The MID Assessment of the Risks of War in the North

According to the main points of the MID’s annual intelligence assessment, which was published in the media on January 14, 2020, there is a “low probability of a war initiated by our enemies in 2020,” but “medium to high probability of maintaining equations of response in the northern arena, with readiness for risks up to and including war.” For example, the MID has assessed that Nasrallah is ready to respond to Israel’s actions, even by starting a war. As evidence, they cite the anti-tank rockets fired by Hezbollah on a military ambulance on the northern border in September 2019, with the intent of killing soldiers (since the rockets missed, Israel avoided a response and escalation).

In other words, as the MID sees it, the probability of an outbreak of war this year, as a result of deterioration and escalation, is not low, and to a large extent depends on Israel’s actions. We can also conclude from the assessment that Israel’s deterrent ability exists but is limited, Israel’s enemies will not hold back over attacks above a specific damage threshold. With the assumption that Israel continues its policy from 2019, it must be prepared for war, and certainly if it accepts the MID recommendation to step up attacks on the Iranians in Syria in 2020 (see below).

The MID Recommendation

On January 14, 2020, the MID published its recommendation—to increase attacks on the Iranians in Syria over 2020, in order to block the Iranians and exploit the death of Soleimani (January 3, 2020) for driving them out of Syria. Before then, on December 25, 2019, in a lecture at the Inter-Disciplinary Center in Herzliya, Chief of Staff Aviv Kochavi said that the focus of the IDF’s campaign between the wars against Iran and its allies is to prevent the entrenchment of the Quds forces in Syria and the threat of precision rockets all over the Middle East. In other words, the MID recommendation is not talking about a completely new objective, but rather a significant step up in the required achievement—destroying the Iranian military presence in Syria

The MID recommendation relies on its assessment that the killing of Soleimani is a foundational event, which could be decisive on the issue of Iranian involvement beyond its borders, with the emphasis on Syria. This is largely due to Soleimani’s importance in shaping Iran’s regional policy and in establishing its military presence outside Iran (the Quds Force), which he commanded. In addition, according to the MID assessment, weakness can be discerned in the extreme Shiite axis led by Iran. Consequently, Iran’s military activity outside its borders could be given lower priority, as the Iranian regime focuses on areas of top priority with respect to its own survival (economic and political stability, defending the country, and its nuclear program). Hezbollah, Iran’s chief ally, is also pre-occupied with its internal-Lebanese arena, and there are indications that it is separating itself from Iran, in the opinion of MID.

At the end of January, the head of MID, Maj. Gen. Tamir Heiman, in a lecture he gave at the Thirteenth Annual International Conference of the INSS, explained the strategic logic behind the MID recommendation. In his words, Syria is at the center of the Shiite axis that is hostile to Israel, and its territory is currently the scene of the struggle between the regional players seeking to shape Syria. This situation provides Israel with an opportunity to influence the shaping of Syria’s role in the future system and to break the extreme Shiite axis against Israel. Heiman added that if Israel fails to act, it could find itself the victim of circumstances, in which the most dangerous scenario is the emergence of the Hezbollah model in Lebanon, whether smaller or improved. As for the risk, Heiman said that this was a calculated risk, and for each operational action there was a controlled assessment.

Discussing the MID recommendation is vital, because its implementation could lead to a significant rise in the risk of war, while its non-implementation could mean (at least in the view of its supporters) missing the chance to drive Iran out of Syria. However, in principle, we must distinguish between the MID intelligence assessment and its recommendations for action. As for recommended actions, the MID does not have the same special professional status that it has in the field of intelligence assessment. Intelligence assessments are restricted to an analysis of the external environment only, while recommendations should result from situation analysis. They combine the assessment of intelligence and the assessment of Israel’s capabilities and its situation in a range of areas, including its political relations and, above all, its readiness for war and its willingness to bear the consequences. According to the Chief of Staff Aviv Kochavi in his lecture on December 25, 2019, “In the next war, I am speaking about war in the North or war with Hamas, the home front will be under intense fire. I look everyone in the eyes and say the fire will be intense, we must recognize this.”

As additional background data for discussing the recommendation, it should be noted that Iranian military presence in Syria is estimated to be about 800 men; in addition, under Iranian sponsorship, there are Shiite militias brought by Iran into Syria, as well as Hezbollah fighters from Lebanon, amounting overall to about 15,000 personnel. This Syrian presence also serves other Iranian interests, which are not directed against Israel, such as preserving the Assad regime and exporting the revolution. Iran is also under pressures to limit its presence in Syria, which is unrelated to Israeli military pressure. These include opposition within Iran to spending on military activity in Middle Eastern countries, while it is suffering economic distress, and complications caused by the Quds Force, among them the mistaken shooting down of a Ukrainian airplane (a development of the campaign against the United States in Iraq, which was led by Soleimani).

Below is an examination of the anticipated benefits versus the possible damage of the MID proposal, based on its assessment of “medium to high probability of maintaining equations of response” and without underestimating the severity of the assessed Iranian threat.

Anticipated benefits: These refer to the size of the potential achievement and its probability. The potential size relates to the question of Israel’s most apparent strategic interests in Syria, and whether increasing the use of force will help to achieve them. Obviously, not all of the Iranian presence in Syria should be deemed a strategic target, and it is necessary to be selective. In terms of ability, the question that should be asked is what the likelihood is of Israel being able to terminate Iranian presence in Syria with military means and to maintain this achievement in the long term. We can assume that this is not very likely. Moreover, the price could be quite high, as Iran’s withdrawal from Syria will not in principle affect its ability to act against Israel from other places. It could even act from within Syria, by means of secret forces, military sorties into Syria from Iraq and Lebanon, the militias it controls (including the Shiite militias and Hezbollah fighters), and Iranian aid to build and operate the Syrian army. At the same time, if Iran leaves Syria, Israel will lose Syria as a space for deterrence and response with respect to Iran.

Anticipated damage: This refers to the likelihood of military conflict and the potential scope of the damage. Increasing numbers of attacks against Iranian presence in Syria will be accompanied by a rise in responses and a growing risk of war (according to the MID assessment). IDF activity in the North requires great precision in order to avoid escalation, but this cannot be completely ensured, and the probability of an anomalous outcome increases with the intensity of the attacks. Meanwhile, the enemy is also learning lessons and striving for achievements. The descent into war could also occur following an action initiated by the enemy in the mistaken belief that Israel would contain it (see, for example, the Second Lebanon War), and the price of this error would be paid by both sides. War in Syria could spread to other fronts as well. Possible damage to Israel is detailed (at least partially) in the scenario that relates to the civilian front. Even if war does not erupt, Israel could pay a heavy price in the context of counterattacks, mistakes, and complications involving foreign forces in Syria. Such complications would limit Israel’s ability to carry out attacks for clear strategic needs, such as thwarting the manufacture and transport of strategic weapons (precision missiles, unconventional weapons) and preventing the entrenchment of the Iranian military in Syria in a way that threatens Israel. Even if the enemy is currently holding back for strategic considerations, it can be assumed that fatal attacks expand the open account. In any event, this policy will commit Israel to further costs and a higher degree of readiness for war that neither side wants.

Summary

One of the components of Israel’s security strategy is to extend the intervals between wars and in the meantime conduct the campaign between the wars (CBW) in order to diminish the enemy’s capability and give Israel the advantage, should war break out. On the face of it, the MID recommendation matches this logic, but actually the benefits of all-out-war against the Iranian military presence in Syria could be outweighed by the dangers. Moreover, the risks of war must be managed from a comprehensive viewpoint, taking account for the volatility in the Palestinian arena and the possibility that Israel could become unwillingly entangled in a conflict between the United States and Iran. Therefore, Israel should not increase its attacks on the Iranians in Syria, apart from what is necessary for clear strategic needs. Given this, the objective of the withdrawal of all Iran’s forces and allies from Syria should presently focus in the political arena. For example, Israel should become involved, through Russia and the United States, in shaping the situation in Syria and work with the United States to ensure that any lifting of sanctions on Iran is conditional upon Iran’s ceasing its subversive and military activities beyond its own borders.

Publication Series: INSS Insight | Topics: Civil-Military Relations, Decision Making, IDF, Intelligence, Iran, Security Concept, Syria, The Northern Arena

Military Intelligence Directorate Recommends Stepping Up Attacks on the Iranians in Syria — A Different View

 

Shmuel Even

INSS Insight No. 1259, February 13, 2020

The probability of an outbreak of war as a result of deterioration and escalation is not low and also depends on Israel—that is the implication of the annual intelligence assessment of the Military Intelligence Directorate (MID). Nevertheless, the MID’s recommendation to the government is to increase IDF attacks against Iranian forces in Syria, in order to exploit the elimination of Soleimani to drive them out of the country. This article analyzes the recommendation and reaches a different conclusion: Israel must not increase its attacks on the Iranians in Syria, beyond what is necessary for its clearly strategic needs, such as countering the supply of strategic weapons and thwarting Iran’s military entrenchment, which could endanger Israel. The risks of moving up a level—to a military struggle and even all-out war on the Iranian military presence in Syria, as implied by the MID recommendation—are far greater than any possible benefits and the struggle should be conducted in the political arena.

The MID Assessment of the Risks of War in the North

According to the main points of the MID’s annual intelligence assessment, which was published in the media on January 14, 2020, there is a “low probability of a war initiated by our enemies in 2020,” but “medium to high probability of maintaining equations of response in the northern arena, with readiness for risks up to and including war.” For example, the MID has assessed that Nasrallah is ready to respond to Israel’s actions, even by starting a war. As evidence, they cite the anti-tank rockets fired by Hezbollah on a military ambulance on the northern border in September 2019, with the intent of killing soldiers (since the rockets missed, Israel avoided a response and escalation).

In other words, as the MID sees it, the probability of an outbreak of war this year, as a result of deterioration and escalation, is not low, and to a large extent depends on Israel’s actions. We can also conclude from the assessment that Israel’s deterrent ability exists but is limited, Israel’s enemies will not hold back over attacks above a specific damage threshold. With the assumption that Israel continues its policy from 2019, it must be prepared for war, and certainly if it accepts the MID recommendation to step up attacks on the Iranians in Syria in 2020 (see below).

The MID Recommendation

On January 14, 2020, the MID published its recommendation—to increase attacks on the Iranians in Syria over 2020, in order to block the Iranians and exploit the death of Soleimani (January 3, 2020) for driving them out of Syria. Before then, on December 25, 2019, in a lecture at the Inter-Disciplinary Center in Herzliya, Chief of Staff Aviv Kochavi said that the focus of the IDF’s campaign between the wars against Iran and its allies is to prevent the entrenchment of the Quds forces in Syria and the threat of precision rockets all over the Middle East. In other words, the MID recommendation is not talking about a completely new objective, but rather a significant step up in the required achievement—destroying the Iranian military presence in Syria

The MID recommendation relies on its assessment that the killing of Soleimani is a foundational event, which could be decisive on the issue of Iranian involvement beyond its borders, with the emphasis on Syria. This is largely due to Soleimani’s importance in shaping Iran’s regional policy and in establishing its military presence outside Iran (the Quds Force), which he commanded. In addition, according to the MID assessment, weakness can be discerned in the extreme Shiite axis led by Iran. Consequently, Iran’s military activity outside its borders could be given lower priority, as the Iranian regime focuses on areas of top priority with respect to its own survival (economic and political stability, defending the country, and its nuclear program). Hezbollah, Iran’s chief ally, is also pre-occupied with its internal-Lebanese arena, and there are indications that it is separating itself from Iran, in the opinion of MID.

At the end of January, the head of MID, Maj. Gen. Tamir Heiman, in a lecture he gave at the Thirteenth Annual International Conference of the INSS, explained the strategic logic behind the MID recommendation. In his words, Syria is at the center of the Shiite axis that is hostile to Israel, and its territory is currently the scene of the struggle between the regional players seeking to shape Syria. This situation provides Israel with an opportunity to influence the shaping of Syria’s role in the future system and to break the extreme Shiite axis against Israel. Heiman added that if Israel fails to act, it could find itself the victim of circumstances, in which the most dangerous scenario is the emergence of the Hezbollah model in Lebanon, whether smaller or improved. As for the risk, Heiman said that this was a calculated risk, and for each operational action there was a controlled assessment.

Discussing the MID recommendation is vital, because its implementation could lead to a significant rise in the risk of war, while its non-implementation could mean (at least in the view of its supporters) missing the chance to drive Iran out of Syria. However, in principle, we must distinguish between the MID intelligence assessment and its recommendations for action. As for recommended actions, the MID does not have the same special professional status that it has in the field of intelligence assessment. Intelligence assessments are restricted to an analysis of the external environment only, while recommendations should result from situation analysis. They combine the assessment of intelligence and the assessment of Israel’s capabilities and its situation in a range of areas, including its political relations and, above all, its readiness for war and its willingness to bear the consequences. According to the Chief of Staff Aviv Kochavi in his lecture on December 25, 2019, “In the next war, I am speaking about war in the North or war with Hamas, the home front will be under intense fire. I look everyone in the eyes and say the fire will be intense, we must recognize this.”

As additional background data for discussing the recommendation, it should be noted that Iranian military presence in Syria is estimated to be about 800 men; in addition, under Iranian sponsorship, there are Shiite militias brought by Iran into Syria, as well as Hezbollah fighters from Lebanon, amounting overall to about 15,000 personnel. This Syrian presence also serves other Iranian interests, which are not directed against Israel, such as preserving the Assad regime and exporting the revolution. Iran is also under pressures to limit its presence in Syria, which is unrelated to Israeli military pressure. These include opposition within Iran to spending on military activity in Middle Eastern countries, while it is suffering economic distress, and complications caused by the Quds Force, among them the mistaken shooting down of a Ukrainian airplane (a development of the campaign against the United States in Iraq, which was led by Soleimani).

Below is an examination of the anticipated benefits versus the possible damage of the MID proposal, based on its assessment of “medium to high probability of maintaining equations of response” and without underestimating the severity of the assessed Iranian threat.

Anticipated benefits: These refer to the size of the potential achievement and its probability. The potential size relates to the question of Israel’s most apparent strategic interests in Syria, and whether increasing the use of force will help to achieve them. Obviously, not all of the Iranian presence in Syria should be deemed a strategic target, and it is necessary to be selective. In terms of ability, the question that should be asked is what the likelihood is of Israel being able to terminate Iranian presence in Syria with military means and to maintain this achievement in the long term. We can assume that this is not very likely. Moreover, the price could be quite high, as Iran’s withdrawal from Syria will not in principle affect its ability to act against Israel from other places. It could even act from within Syria, by means of secret forces, military sorties into Syria from Iraq and Lebanon, the militias it controls (including the Shiite militias and Hezbollah fighters), and Iranian aid to build and operate the Syrian army. At the same time, if Iran leaves Syria, Israel will lose Syria as a space for deterrence and response with respect to Iran.

Anticipated damage: This refers to the likelihood of military conflict and the potential scope of the damage. Increasing numbers of attacks against Iranian presence in Syria will be accompanied by a rise in responses and a growing risk of war (according to the MID assessment). IDF activity in the North requires great precision in order to avoid escalation, but this cannot be completely ensured, and the probability of an anomalous outcome increases with the intensity of the attacks. Meanwhile, the enemy is also learning lessons and striving for achievements. The descent into war could also occur following an action initiated by the enemy in the mistaken belief that Israel would contain it (see, for example, the Second Lebanon War), and the price of this error would be paid by both sides. War in Syria could spread to other fronts as well. Possible damage to Israel is detailed (at least partially) in the scenario that relates to the civilian front. Even if war does not erupt, Israel could pay a heavy price in the context of counterattacks, mistakes, and complications involving foreign forces in Syria. Such complications would limit Israel’s ability to carry out attacks for clear strategic needs, such as thwarting the manufacture and transport of strategic weapons (precision missiles, unconventional weapons) and preventing the entrenchment of the Iranian military in Syria in a way that threatens Israel. Even if the enemy is currently holding back for strategic considerations, it can be assumed that fatal attacks expand the open account. In any event, this policy will commit Israel to further costs and a higher degree of readiness for war that neither side wants.

Summary

One of the components of Israel’s security strategy is to extend the intervals between wars and in the meantime conduct the campaign between the wars (CBW) in order to diminish the enemy’s capability and give Israel the advantage, should war break out. On the face of it, the MID recommendation matches this logic, but actually the benefits of all-out-war against the Iranian military presence in Syria could be outweighed by the dangers. Moreover, the risks of war must be managed from a comprehensive viewpoint, taking account for the volatility in the Palestinian arena and the possibility that Israel could become unwillingly entangled in a conflict between the United States and Iran. Therefore, Israel should not increase its attacks on the Iranians in Syria, apart from what is necessary for clear strategic needs. Given this, the objective of the withdrawal of all Iran’s forces and allies from Syria should presently focus in the political arena. For example, Israel should become involved, through Russia and the United States, in shaping the situation in Syria and work with the United States to ensure that any lifting of sanctions on Iran is conditional upon Iran’s ceasing its subversive and military activities beyond its own borders.

Publication Series: INSS Insight | Topics: Civil-Military Relations, Decision Making, IDF, Intelligence, Iran, Security Concept, Syria, The Northern Arena

The Defense Budget for 2017-2018

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INSS Insight No. 880, December 28, 2016

Shmuel Even, Eran Yashiv

In the early morning hours of December 22, 2016, the Knesset approved Israel’s state budget for 2017-2018. Within this package, the defense budget component was the product of joint work by the Ministry of Finance and the Ministry of Defense, based on the Kahlon-Ya'alon agreement. Significantly, the defense budget was drafted without the wrangling characteristic of the dynamic between the ministries in previous years, and the significant improvements in the process of drafting the budget are highly commendable. Issues particularly worthy of attention include implementation of the new pension plan; components of the five-year Gideon Plan; the channeling of resources to emergency depots and reserve forces training; and transparency regulations. In addition, discussions between the Ministry of Defense and the Ministry of Finance should begin already in early 2017 to determine the effect of the changes in the US aid agreement on the budget, at least for 2019-2020.

Topics: 

Israel, IDF

In the early morning hours of December 22, 2016, the Knesset approved Israel’s state budget for 2017-2018. Within this package, the defense budget component was the product of joint work by the Ministry of Finance and the Ministry of Defense, based on the Kahlon-Ya'alon agreement. Significantly, the defense budget was drafted without the wrangling characteristic of the dynamic between the ministries in previous years. 

Highlights of the Agreement between the Ministry of Finance and Ministry of Defense

Improved work relations between the Ministries of Finance and Defense replaced the familiar inter-ministry arguments and dissatisfaction, which peaked with the publication of the Locker Commission report. The most important product of the joint work is the Kahlon-Ya'alon agreement on defense budgets for 2015-2020, followed by additional understandings between the ministries reached in 2016 regarding specific issues in dispute. The principles of the agreement and understandings were adopted by the government.

Finance Minister Moshe Kahlon speaking at the Knesset, December 21, 2016,in advance of the vote on the budget for 2017-2018. Photo: Knesset website

According to the agreement, the IDF's multi-year Gideon Plan will be fully budgeted. The plan sets clear priorities and includes significant streamlining steps and tools for monitoring and decentralizing the various branches. The agreement sets a clear budget framework for the plan, such that if the budget is increased in one area, it will need to be reduced in another area. Expected streamlining steps include decreasing the number of reservists by 100,000; integrating headquarters; and converting some jobs to civilian positions. In addition, understandings were reached on the service and pensions model, budgets of the Disabled Rehabilitation Division, the Department of Families and Commemoration, and other issues that for years were at the heart of the dispute between the ministries. Certain budget items were taken out of the defense budget altogether. No less important is the mechanism for resolving problems and making changes to the agreement, including a negative incentive for requesting unilateral changes. All of this was done in order to provide stability in the process of drafting the defense budget.

One prominent aspect of the agreement is the new standing army service model, based primarily on the work of the Tishler Committee. The most significant component of the model is the promotion track for officers and the addition of an exit point from the army. An exit point after 14 years of regular service (meaning after age 35) has been added to the existing exit point after the first seven years of regular service. At this exit point, if an officer is not promoted (to a senior/professional major or lieutenant colonel) he or she is to be released with a grant of up to half a million NIS. Officers who are promoted will retire on average at the age of 43. The current average age of retirement is 48; this is a reversal in the Ministry of Finance's policy, which in the past advocated a later retirement age. The process is meant to reduce significantly the number of officers entitled to a bridging pension, and thus reduce the cost of this pension. In contrast, the target retirement age of NCOs was raised to 53, in order to maximize the utilization of their professional skills, and it was agreed that additional positions in the army would be filled by civilians.

The standing army model is meant to force the IDF to be more selective in choosing its staff. At the same time, it is expected to lead to a transformation of the army over time, including a decline in the level of experience of officers due to shorter terms and/or the fewer tasks undertaken in the standing army. The model's conditions and the periodic changes to service conditions may decrease the attractiveness of enlisting for military service such that the IDF may need additional solutions in order to compete in the job market. 

The transparency and monitoring mechanisms are an important issue in the agreement. Since 2005, the auditor at the Ministry of Defense has been appointed by the Ministry of Finance Accountant General. According to the new Defense budget proposal, the Accountant General and her staff have the same access to the budgetary information systems as does the Ministry of Defense budget department. As part of this, "a budget terminal has been made available to the Ministry of Finance that enables it to directly observe the Ministry of Defense's budget in real time." In April 2016, an inter-ministerial transparency regulation was signed that regulates how the information is made available to the Ministry of Finance. This snapshot is somewhat overshadowed by the State Comptroller's report on pension arrangements in Israel published in October 2016, whereby "the IDF Manpower Directorate has made it difficult for the Ministry of Finance to receive the Chief of Staff's policy document on retirement benefits, in violation of the regulation on implementing government decision 4088 on improving monitoring of the IDF and its transparency." According to the Comptroller's report, during 2013-2015 the pension rate increases provided to IDF retirees as part of the "Chief of Staff's supplement" was on average 8.5 percent, while the Ministry of Finance Accountant General was only aware of an average of 6 percent.

The Defense Budget for 2017-2018

According to the budget proposal for 2017-2018 (dated October 2016), the defense budget for 2017 will be 70.7 billion NIS gross and 52.2 billion NIS net. The 18.5 billion NIS difference is listed as "income-dependent expenditure," almost all of which is United States aid, including: funding of purchases in the US, aid converted into shekels, financing for joint projects, and aid surpluses not utilized in the past. The defense budget for 2018 will be 70.5 billion NIS gross and 54.0 billion NIS net, with a structure similar to the 2017 budget.

Some details worth noting:

Size of the budget: For comparison, the defense budget in 2016 (with all of its changes) is estimated at 69.7 billion NIS gross and 61.8 billion NIS net. In gross budget terms, 2016 and 2017 are similar in size, but the net defense budget for 2017 is significantly smaller than the net budget for 2016. The reason for this is technical: starting in 2017 (in accordance with the Kahlon-Ya'alon agreement) all the US aid will be listed under the category "income-dependent expenditure," outside of the net budget and part of the gross budget, while in the past part of the US aid was included in this category and part in the net budget. This change in itself does not affect the resources that the Defense Ministry receives, but it enables distinguishing easily between the portion of the defense budget that is funded by the state (subject to its fiscal policy) and the portion funded through US aid, which is unique to the defense budget. This may contribute somewhat to the management and visibility of the defense budget. Nonetheless, the budget proposal states that the net budget includes VAT on purchases with US aid. Although this is merely an accounting procedure by the Ministry of Finance, which involves allocating state funds for tax purposes and collecting them back once purchases have been made, it would be better to present the net defense budget without this unusual figure. 

The net IDF budget and other expenditures: According to the budget proposal for 2017, the Ministry of Defense's expenses under the category of non-classified items is 15.4 billion NIS. The main items in this category include retirement benefits – 7.85 billion NIS; Disabled Rehabilitation Division – 3.42 billion NIS; and Department of Families and Commemoration – 1.65 billion NIS. The reduction in expenses in this category out of the total budget shows the size of the budget allocated to the IDF and units in the Ministry of Defense whose budget is classified.

Unexpected security events: As in the past, the defense budget does not include the costs of warfare in the course of unexpected security events. For example, the Ministry of Defense received 8.2 billion NIS in compensation for the Second Lebanon War; 2.45 billion NIS for Operation Cast Lead; and 7 billion NIS for Operation Protective Edge. 

Reduction in the share of the defense budget: According to the Ministry of Finance's forecast, the ratio of defense spending to total government spending (excluding principal and interest payments), which decreased from 23.2 percent in 2010 to 20.4 percent in 2015, is expected to continue to decline: 19.8 percent in 2016; 19.3 percent in 2017; and 18.9 percent in 2018.

The new US aid agreement: Although it does not apply to the 2017-2018 budgets, the US aid agreement for 2019-2028, signed in September 2016, is a challenge that must be prepared for during this period. Moreover, the annual military aid budget will increase, and its composition will substantially change, since the special arrangement that enabled Israel to convert part of the aid to shekels for the purpose of purchasing from local industries and purchasing jet fuel with aid money, will be phased out. In other words, Israel will have to finance purchases in shekels that until now were financed through US aid. This may change the defense budget framework and require new understandings between the Ministry of Finance and the Ministry of Defense.

Conclusions and Recommendations

The significant improvements in the process of drafting the budget are noteworthy and commendable. As a matter of principle, it is important to continue to examine the size of the defense budget within the state budget from a long term perspective, as a function of changing defense and civilian needs. Regarding the agreement, it is important to examine its application. The following issues are especially worthy of attention:

a. The new pension plan: is it implemented as agreed? Does it affect the quality of manpower in the IDF, and if so, how?

b. Components of the Gideon Plan implemented within the agreed budget framework: how does the balance principle – whereby if there are increases to the budget in one area, there must be reductions elsewhere – change in face of new threats?

c. Channeling resources to emergency depots and training of the reserve forces; learning from gaps in the IDF's preparedness in past incidents.

d. Implementing the transparency regulations, and monitoring their effectiveness.

The major issue since the agreement between the ministries was reached concerns the changes in the conditions of US aid. Since multi-ministerial planning processes in Israel take a long time, and preparation of the 2019 budget is in any case planned for the first quarter of 2018, discussions between the Ministry of Defense and the Ministry of Finance should begin already in early 2017, in order to determine the effect of the aid agreement on the budget, at least for 2019-2020