As Israel's military prepares to counter an expected surge of violence over the Palestinians' bid for statehood, growing tension with peace partner Egypt and another war with Hezbollah, pressure grows for slashing the defense budget to boost social spending.

That particular battle is raising a swelling political furor, and rarely publicized allegations of sleight of hand dealings by the Defense Ministry, that will make it difficult for Prime Minister Binyamin Netanyahu, a security hawk, to avoid cutting funds for the military.

The military and its supporters are making much of the plethora of threats the nation is facing, a confluence of potential conflict that carries serious perils.

They do that whenever the defense budget is threatened but this time Netanyahu has had to face unprecedented street protests by Israelis demanding more funding for social programs to alleviate a soaring cost of living.

The Jerusalem Post quoted an unidentified "senior source on the General Staff" as warning that the military "will collapse in five years, and possibly earlier," if the 2012 defense budget is cut.

"It will be a different military since we will not be able to provide missile defense systems, to buy more fighter jets, to buy more tanks and ammunition if the budget is cut."

Even so, Defense Minister Ehud Barak, a former military chief of staff and Israel's most decorated soldier, said Sunday that defense cuts would have to be made, although he gave no specifics.

"The social protests were real and provided us with an opportunity to solve some real social problems and the Defense Ministry needs to play its part," he said.

Clearly, pressure on Netanyahu for defense cutbacks has intensified in recent days amid disclosures the Defense Ministry has its own budgetary system that isn't aligned with those used by the Cabinet and Parliament.

"In effect, there are two sets of books," said the Globes business daily. "It is impossible to monitor and control the budget activity of the Ministry of Defense and the armed forces … This practice occurs at no other ministry."

On Sept. 1, Barak, who was prime minister a decade ago, declared the defense budget would not be cut to meet unprecedented demands across the political social spectrum for greater spending on social programs.

"Life itself precedes quality of life," he said. Investment in Israel's security is an "insurance policy. There is no possibility to implement these cuts to assist the public without exposing Israeli citizens to danger."

There were reports that a committee headed by Professor Manuel Trajtenberg appointed by the government to find ways to implement socio-economic change, had recommended lopping $809.9 million off the defense budget.

If that's the case, the 2012 defense budget would be cut to around $6.5 billion, out of the $13.62 billion that usually goes to the military, including little-known supplementary allocations.

The Post quoted the General Staff source as saying, "We've looked at every way possible to … try to make cuts but the minimum we need is $8.089 billion."

The Defense Ministry accused the Finance Ministry of failing to honor funding agreements, even settling accounts incurred in the 22-day invasion of the Gaza Strip in December 2008.

Globes reported that Finance told Defense that it would agree to reduce the proposed budget cuts for the military if Defense opened its "double financial system, allowing transparency and control and complies with multiyear budget limitation measures."

Ever since the state was founded in 1948, the military has been one of the nation's most cherished institutions. It's rarely been challenged and governments crossed swords with it at their peril.

On Sept. 14, Globes columnist Stella Korin-Lieber wrote: "If implementation of the recommendations of the Trajtenberg Committee is to be based mainly on transferring money from the defense budget to social spending, the committee may as well disband right now. They are wasting their time …

"No Israeli prime minister has ever been thrown out ignominiously because children had no food or because families were without roofs over heads," she wrote.

"But prime ministers have been thrown out, and will be thrown out, because of a bungled war or a military operation with scores of casualties. Because then, as always with failures, the army will point to the excuse -- no money."