Two major concepts guide its thinking. One is that the Middle East is becoming more menacing.

For years Israel believed the main threat to its existence was rising in Iran, which has been developing a nuclear capability and the missiles to deliver nuclear bombs. It coped with the Palestinian intifada that experts consider a "low-intensity conflict."

Yet it believed a full-fledged conventional war has become unlikely. It made peace with Egypt and Jordan, withdrew from Lebanon; Syria was too weak to fight Israel alone. The U.S. occupation of Iraq laid to rest fears that a mighty eastern front would gang up on it.

Consequently, Israel cut its defense budget. It closed combat divisions and air force squadrons, and dismissed career army men. It cut down its stockpiles.

Then came the Second Lebanon War that caught it by surprise.

Now military sources say Syria and Iran are helping Hamas build an army in the Gaza Strip and that "many tens of tons" of TNT have been smuggled into Gaza since June.

Israel's Sept. 6 bombing in northern Syria demonstrated louder than any words its concerns over nuclear proliferation and its readiness to take action to prevent it. Iran's plans are the most disconcerting, but there is Syria and fears other Arab states such as Algeria and Sudan might seek such weapons. It fears weapons of mass destruction might reach Hamas and Hezbollah, whom it regards as terrorist organizations.

Nor is it complacent about developments in Egypt.

In the last parliamentary elections, the Muslim Brotherhood made great strides until President Hosni Mubarak stopped it in its tracks. But who will succeed Mubarak?

So Israel decided to allocate 8 percent of its gross national product to defense. That is 6 percent more than in other members of the Organization for Economic Cooperation and Development, noted Professor Manuel Trachtenberg, who heads the National Economic Council at the Prime Minister's Office.

According to the new plan, which still requires Cabinet approval, Israel will seek a squadron or two of F-35 stealthy supersonic multi-role jet fighters. The first F-35s are not expected before 2012.

Earlier this month the air force exposed its newest unmanned aircraft that can climb to an altitude of 45,000 feet, stay aloft for 36 hours and carry a load of 1 ton.

Another spy satellite is to be launched shortly.

As Iran moves to build nuclear weapons and ballistic missiles to deliver them, Israel is embarking on developing the third generation of its Arrow missile interceptor. Other scientists are building the Iron Dome system that should knock out short-range, cheap rockets that have been haunting Israelis who live near the Gaza Strip.

The navy is expecting two more German-built submarines under an agreement signed last year and wants to acquire another missile boat that should be far more advanced that any it operates.

An enhanced naval capability would give Israel "more strategic flexibility" to operate far from home, recently retired Maj. Gen. Yiftah Ron-Tal noted in the Yisrael Hayom newspaper.

The military's major effort will, however, go to boosting its ground forces as it revives some of the major concepts that traditionally guided warfare.

Israel went to war with Hezbollah believing its massive air power would do the job. It erred.

The airstrikes wreaked havoc in Lebanon, but Hezbollah militants nevertheless succeeded in showering Israel with more than 100 rockets a day. It took time until military commanders agreed troops had to physically occupy the rocket-launching areas in order to stop that fire.

So the military is now, once again, aiming for a quick decision in a ground campaign and hopes to achieve it through maneuvers and heavy firepower.

It intends to establish a new division and build more Merkava IV tanks. It believes these tanks are the best-protected in the world and are suited to cope with the Syrian rough terrain.

There is a limit to the number of Merkavas its industries can produce a year, so the army plans to upgrade hundreds of older Merkava III and perhaps Merkava II tanks.

For years, Israel transported troops in U.S.-made M-113s, but they are not safe enough. Israel removed the turrets of old British Centurion and captured Russian T-55 tanks and refitted their hulls to serve as armored personnel carriers. Now it intends to build hundreds of new armored personnel carriers basing them on the Merkava's plans. It might license an American firm to build them for it, a senior military source told United Press International.

To improve the tanks and APCs' protection, Israel will install a new system that should detect incoming missiles and melt them.

Some of the money for all this will come from the United States. Washington has undertaken to increase its military aid from $1.8 billion to $3 billion a year.

It reckons it will need more soldiers so it will open more jobs to women and expand the size of the career army.

A major effort is now under way to train all the combat units after years in which such training was curtailed, be it to free more units to police the occupied territories or to save money.

Since the war, the standing army's combat units have trained extensively, sometimes on the Golan Heights. The paratroopers, for example, have gone through five months of intensive training. By the beginning of last summer half the reserve battalions had trained, and according to the army's weekly, Bamahane, every unit will devote 17 weeks to training next year.

Next year the army expects to begin equipping all its battalions with small drones that can be launched near the battle zone and relay pictures to battalion, company and division commanders.

So new devices will help implement some of the old concepts.

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