The Israel Air Force may stop the production of the Iron Dome and David Sling missile interception systems in 2012 as a result of insufficient funds, a military budget breakdown revealed on Sunday.

Last month, the government backtracked on its intention to cut NIS 3 billion from the defense budget, meant to pay for social benefits in the wake of last summer's wave of protests according to the recommendations of the Trajtenberg committee.

Open gallery view An Iron Dome rocket being launched to intercept a missile near Be’er Sheva on Sunday August 21, 2011. Credit: AP

The move was decided after Prime Minister Benjamin Netanyahu accepted the Defense Ministry's stance, according to which such a dramatic cut would be unwise in the face of the political upheavals taking place across the Mideast. these, in turn, could increase terror threats against Israel.

However, despite succeeding in averting a drastic budget cut, the IDF's financial woes are far from over.

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Last year saw the end of the military' years-long budget plan, known as "Tefen," with 2012 scheduled to launch a new five-year plan – "Halamish," postponed from 2011 over the social protests.

It seems, then, that discrepancies carried over from the "Tefen" program, along with funds allocated for special programs such as the rushed construction of the barrier along the border with Egypt, have created a deficit of NIS 7 million.

After a recent government addition of NIS 1.8 billion in defense funds, and an IDF-initiated NIS 1.5 billion cut, the military is still missing NIS 3.7 million compared to its projected budget.

As a result of this gap, the IDF plans a series of measures, the most dramatic of which is to ground a considerable part of the IAF's forces for the year. Such a step, not taken in a few decades, severely damages the air force's preparedness.

Other measures include an almost utter stop of acquisitions from Israel's military industry, which would put a halt to Rafael's Iron Dome production line, despite the fact that the U.S. gave Israel $205 million to finance four more batteries.

Budget issues will also have to sideline the development of the David Sling system, geared at targeting longer-range missiles. The acquisition of Merkava 4 battle tanks, planned for 2013, will also be postponed.

A top military official told Haaretz that the planned measures could severely injure the IDF's war readiness, adding that the "government is aware of the gravity of situation, but until now our demand to reduce budget discrepancies has not been answered."

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