The Israeli government on Thursday bowed to pressure from the defence establishment and voted to give it a 2.75 billion shekel ($738 million, 573 million euros) budget increase, official statements said.
The rise came less than six months after the cabinet approved a 3.0 billion shekel cut as part of the overall 2014 austerity budget, which Finance Minister Yair Lapid said was essential for the country's economic health.
A government statement Thursday evening, after a meeting of the ministerial committee on national security, said there were now "surplus budget funds" from which the money could be found.
It was less than the rise of around 4 billion shekels which the military had sought, but more than Lapid had been willing to endorse.
"We unanimously reached a decision which strikes a balance between the great security challenges facing the state of Israel and the need to keep guiding the Israeli economy responsibly in the face of the global economic crisis," Prime Minister Benjamin Netanyahu said in a statement.
It said that a public committee would be formed, "to examine all aspects of the defence budget" and to speed up the transfer of military bases from prime property in central Israel to lower-priced sites elsewhere.
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A finance ministry statement did not hide Lapid's frustration with Thursday's decision.
"The prime minister has decided to add to the defence budget although I objected during the debate," it quoted him as saying.
"We still say that the security establishment must act with financial responsibility and become more efficient," he added.
"I am glad that we were able to prevent transfer of the full amount that the security establishment requested."
The amounts in dispute are a small part of what is still likely to be a 2014 military bill of about 56 billion shekels.
With civil strife and political turmoil raging in neighbouring Egypt and Syria, and with Iran seen as a potential nuclear threat, defence chiefs had lobbied hard against any cuts. They warned politicians they would bear responsibility if they eroded the ability of security-conscious Israel to defend itself.
Lapid has warned that if defence spending is not reined in the axe will fall on health, education and social spending.