Netanyahu says agreed Gaza truce to focus on regional militants

Prime Minister Benjamin Netanyahu said Israel agreed to a permanent truce in its 50-day war on Gaza in order to keep focused on the threat from regional militants.

"We fought for 50 days and we could have fought for 500 days, but we are in a situation where the Islamic State is at the gates of Jordan, al-Qaeda is in the Golan and Hezbollah is at the border with Lebanon," Netanyahu said in an address on public television.

He was referring to Islamic State militants in Syria and Iraq -- both neighbours of Jordan -- Al-Qaeda-linked Al-Nusra Front Syria rebels on the Israeli-annexed Golan and Lebanon's Shiite movement Hezbollah.

"We decided not to get bogged down in Gaza, and we could have, but we decided to limit our objective and restore calm to Israeli citizens," Netanyahu added.

His remarks come as the United States, Israel's chief ally, is calling for a global coalition to fight the militants who have set up an Islamic "caliphate" in areas they have overrun in Syria and Iraq.

US President Barack Obama has said he will send Secretary of State John Kerry to the Middle East to discuss the plan, which he said would involve military, diplomatic and regional efforts.

Calm returned to the Gaza Strip after a Tuesday ceasefire, a permanent truce ahead of further expected negotiations between Israel and the Hamas rulers of Gaza on a long-term peace deal.

Netanyahu seeks cuts to 2014 budget to finance Gaza war

Israel's cabinet convened on Sunday to debate Netanyahu's call for swingeing budget cuts to pay for the 50-day military campaign in Gaza.

Netanyahu, Defence Minister Moshe Yaalon and Finance Minister Yair Lapid are seeking cuts of two percent from every government ministry -- other than defence -- to raise about 2 billion shekels ($561 million, 425 million euros).

According to documents released by the cabinet office ahead of Sunday's weekly meeting, the biggest proposed cut is to the education ministry, which is being asked to give up 480 million shekels.

Welfare and social services are being asked for 62.6 million and health spending is to be trimmed by 43 million.

Welfare Minister Meir Cohen protested, saying there was no more fat on his budget to trim.

"From whom will we take? From those who have nothing to put in their children's sandwiches for school?" he said on Israeli army radio.

Netanyahu's own office, which is responsible for the domestic and foreign intelligence agencies, the Atomic Energy Commission and other departments, is to lose 33 million.

The foreign ministry, long bedevilled by dwindling budget allocations and rocked earlier this year by a strike of senior diplomats and a lockout of the foreign minister from his Jerusalem office, needs to trim 11.9 million shekels.

The original 2014 budget was itself an austerity package which Lapid said was essential for the country's economic health.

It was to have cut 3 billion shekels from defence spending but after hard lobbying from Yaalon 2.75 billion shekels were reinstated.

Lapid warned at the time that if defence spending were not reined in the axe would fall on health, education and social spending.

Sunday's cabinet session took place in southern Israel, near the Gaza border, in solidarity with Israelis pounded by thousands of rockets and mortar rounds until Tuesday's truce.

"I hope that this quiet will continue, but we are prepared for any scenario," Netanyahu's office quoted him as telling the meeting.