"The review, essentially a workshop of the General Staff's top brass, is expected to analyze the shape the IDF will take in the coming years, particularly in terms of large procurement projects," Amos Harel wrote in a Haaretz report.

"After the war in Lebanon last summer, it was announced that 2007 would be a year of readiness and a return to fitness and the IDF is taking a deep breath to prepare a multiyear program -- to 2012, with the help of the state budget and American aid," Hanan Greenberg wrote in a report from Ynet, the Web site of Israeli daily newspaper Yediot Aharonot.

This means changes in priorities for the military budget: "Shifts in the nature of the threat tend to redistribute defense spending," Bernard Finel, a senior fellow at the American Security Project, explained to UPI in an e-mail message. The American Security Project is a non-profit national security and foreign policy think tank.

Developments during the past year seem to indicate the Army will win a big piece of the budget pie. The war in Lebanon highlighted the weaknesses in the IDF's ground forces; the IDF's first air force-trained chief of staff, Dan Halutz, was forced to resign in the aftermath; the new chief of staff, Gabi Ashkenazi, is an army man.

Key points in the discussions are expected to be principles of intelligence gathering in relation to the territories; the Lebanese group Hezbollah, Syria and Iran; sources of manpower following a decline in enlistment; and the challenges facing Israel in the coming years, Greenberg wrote.

The money could also be spent on new tanks or on sophisticated tank shields, Israel's Channel 2 News reported Sunday.

"Air force representatives will ask to discuss the acquisition of Lockheed Martin's F-22 plane," Greenberg said. "The F-35 ... is (also) in the air force's sights."

However, other observers say the air force will probably have to wait a few years to get the F-35s: "No one in the defense establishment is disputing the fact that the F-35 should be the air force's next-generation fighter," Harel said. "The argument is over the timing of the deal."

"The fighter plane transaction is worth several billion dollars, and therefore the IDF will need to evaluate its consequences," Greenberg said.

Harel said: "The Israel air force lobby at the (IDF's) General Staff suffered a setback when (former Chief of Staff Dan) Halutz resigned, and some generals ... are unlikely to be sad to see the massive procurement project for a stealth strike fighter postponed for a year or two."

Halutz had planned to cut back on ground forces. But after the war the new defense minister, Ehud Barak, reversed that plan and "even ordered the creation of new armored divisions made up mostly of reservists," Harel said.

But no matter where the money ultimately goes, it is likely to spur an improvement in what Barak called "the poor state of affairs" in the defense establishment and the IDF.

Barak, a former IDF chief of staff himself as well as a former prime minister of Israel, said he was surprised at these conditions when he was appointed to his post, according to a Haaretz report.

"In order to fight a potential war on multiple fronts, the IDF must improve its logistical endurance by increasing its supply of ammunition and weapons, and holding more training exercises," Barak said in the report.

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