The Israeli parliament on Thursday approved the state budget for 2015-2016 after an overnight marathon discussion.
The budget was passed by a narrow 61-59 vote, Xinhua news agency reported.
The approval followed some 420 votes on objections by opposition members, aiming to thwart the approval of the budget.
The financial plan sets the budget for 2015 at 329.5 billion shekels (about $84 billion) and 343.3 billion shekels for 2016.
The deficit target was set at 2.9 percent of the gross domestic product, significantly higher than the 2.5 percent ceiling recommended by Israel's central bank governor, who warned a higher deficit might risk the financial market.
The public security ministry's budget will be increased by 1. 7 billion shekels to allow 200 million shekels to fight internal crimes in the Arab society and additional 40 million shekels to beef up police forces in East Jerusalem.
Finance Minister Moshe Kahlon hailed the budget, saying it "addresses fundamental issues in the Israeli economy and society."
