Israeli Defense Minister Ehud Barak has convened a secret panel to argue for increased defense spending.

The panel produced a report stating that since 2008 Israel's defense budget has declined by $1.24 billion. Copies of the Barak panel's report have been provided to Israel military Chief of Staff Lt. Gen. Benny Gantz.

The committee, headed by Professor Asher Tishler, the dean of the management department at Tel Aviv University and who specializes in defense issues, reviews the period 2008-12, the Haaretz newspaper reported.

Members of the defense establishment are reportedly optimistic that the Tishler report will influence Israeli Prime Minister Binyamin Netanyahu and the Israeli Finance Ministry to increase the defense budget from its 2011 level of $14.89 billion to $15.39 billion in 2012.

The Israeli military industrial complex remains an integral part of the Israeli economy.

Among the major Israeli defense companies are: Achidatex (body armor and ballistic products, bulletproof vests): Aeronautics Defense Systems (Aerostar Unmanned Air Vehicle System); Defense Industries International (manufacturer of personal military and civilian protective equipment and supplies); DefenSoft (software for planning defense and security systems); dsIT Technologies (naval sonar and acoustics-related projects); Export Erez (manufacturer of protective equipment and personal military supplies); Israel Military Industries (aircraft equipment, pylons, fuel tanks, chaff and flare dispensing systems, UAVs, airborne electronic control units for aircraft-launched missiles, handgun and rifle ammunition; Lehavot HaBashan (design and manufacture of ruggedized equipment); Mofet Etzion (LIBA Armor, protection from IEDs; Reshef Technologies (developer and manufacturer of artillery, mortar, tank and rocket fuses) and Soltam Systems (artillery systems with fire control computer, muzzle velocity radar (MVR), inertial navigation and target acquisition. 155mm guns and howitzers with standard NATO ammunition.)

In January, Netanyahu said Israel would boost defense spending by about 6 percent in 2011 because of deepening regional instability, after stating in 2011 that he would make cuts to the military to finance social reforms.

"We are going to add 3 billion shekels ($700 million) to the defense budget," he said.

Netanyahu told a Cabinet meeting: "I have reflected on this question but, in view of what has happened in the region, I have reached the conclusion that cutting the defense budget would be a mistake, even a big mistake.

"Any sensible person can see what is happening around us ... All these changes have strategic implications for the national security of the state of Israel, for our ability to face the new challenges and instability."

Netanyahu added that the Israeli army "is the shield of the country, which is why we must increase its means. In the past, we discovered things late, whereas now we will become aware of them in real time."

As in the United States, rising military budgets have become an object of concern to the electorate as social programs are slashed.