Jerusalem, Nov 1 (IANS): Israel's cabinet approved a 2025 wartime budget on Friday, detailing measures and tax increases to bolster military spending for ongoing operations in the Gaza Strip and Lebanon.

The 607.4-billion-shekel (162 billion US dollars) budget still faces three rounds of voting in the Knesset, Israel's parliament, with final approval anticipated by the end of January 2025. Certain tax hikes, however, are expected to be approved separately in advance.

Finance Minister Bezalel Smotrich described the budget as "a stabilising budget aimed at addressing the needs of war and the significant challenges facing the Israeli economy."

Prime Minister Benjamin Netanyahu called it "an important, challenging, but necessary budget in a year of war," according to a statement from his office, Xinhua news agency reported.

Key austerity measures include raising the value-added tax (VAT) from 17 to 18 per cent and freezing a planned increase in child allowance payments.

Israel's extensive operations in Gaza and its prolonged conflict with Hezbollah in Lebanon, ongoing for over a year, have drained tens of billions of shekels from public finances. These expenses cover munitions, equipment, the call-up of more than 300,000 reservists, and support for the wounded and displaced among both soldiers and civilians.