Sources close to Defense Minister Ehud Barak accused Finance Minister Yuval Steinitz of being "childish," saying he chose to "punish" Barak by cutting the defense budget after the defense minister opposed the package of tax hikes and budget cuts which was approved by the cabinet on Monday, Army Radio reported.

"Steinitz's behavior is childish and harmful to the state's security," Army Radio quoted the sources as saying.

The cabinet approved the series of sweeping austerity measures, including tax hikes and spending cuts which it hopes will raise NIS 14.15 billion next year and reduce the budget deficit by 1.5 percent.

The plan passed by a vote of 20 to 9, with the four Shas ministers, the four Independence Party ministers and Social Welfare Minister Moshe Kahlon (Likud) voting against. When Steinitz saw that Barak was voting against it despite his ministry being exempt from the cuts, Steinitz decided to slash NIS 100 million from the defense budget.

The government will implement an across-the-board 5% cut to ministry budgets for the remainder of this year and a further 3% cut next year, to finance what Netanyahu and Steinitz have called “changes in priorities.”

Knesset Speaker Reuven Rivlin on Tuesday said that the healthcare system should be excluded from the package of budget cuts.

Speaking at the Israeli Medical Conference, Rivlin said that "the government is acting correctly by demonstrating economic responsibility and attempting to plug up the hole in the budget created by urgent national projects. But a cut to health is a cut to security."

Rivlin referred to the healthcare system as "the last line of defense which cannot be allowed to be broken."

Opposition leader Shaul Mofaz on Tuesday harshly criticized the austerity measures, saying in an Army Radio interview that "the simple citizen is being forced to pay for Netanyahu's mistakes."

Mofaz attacked Netanyahu for continually trumpeting the government's accomplishments in maintaining a health economy amid the world financial crisis and suddenly declaring the economy was in trouble and austerity measures were necessary.

Following the passage of the austerity measures, social justice protesters announced that a mass demonstration against the government's economic policies would be held in Tel Aviv on Saturday evening. Protest organizers claim that Netanyahu has broken his promise made in the wake of last summer's social justice protests to bring down the cost of living.

Nadav Shemer contributed to this report.

Please LIKE our Facebook page - it makes us stronger