In testimony to the Knesset Foreign Affairs and Defense Committee on July 31, Gantz warned that a sharp reduction in military spending would reduce Israeli defense capabilities, Middle East Newsline reported. He said the first targets of a budget cut would be unidentified military programs.

"We need to remember that we are entering a period of instability and uncertainty, turning the threats in the region more grave," Gantz said, "We may be forced to give up new weapons systems but not our combat readiness and skill."

In July, the Netanyahu government faced its biggest threat as more than 150,000 people demonstrated across the country for affordable housing and lower prices on staples. The protests were said to have alarmed the prime minister, who has vowed to meet some of the demands of the protesters.

"We must beware of simplistic statements claiming that it is possible to make cuts to the defense budget," Netanyahu told the Knesset Foreign Affairs and Defense Committee on Aug. 1.

The military has submitted an assessment of a Palestinian insurgency campaign in the West Bank and Jerusalem. The Israel Army has already ordered more than $22 million worth of non-lethal and less-than-lethal weapons and equipment to confront protesters organized by the Palestinian Authority and the ruling Fatah movement.

"The potential for conflict certainly exists," Gantz said. "We predict that several thousand will exercise non-violent protest and make their way toward the volatile areas near the [security] fence or the [Jewish] settlements."

The major programs in the military's five-year plan were said to include missile and rocket defense, an intelligence upgrade and a spy satellite. Gantz said military training would continue to be a priority in 2012.

"The immediate implication is that we'll be forced to give up new systems," Gantz said. "But we cannot allow a situation where troops are not training."

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