With much of the Middle East in turmoil, new realities are emerging for Israel and her neighbors, reshaping the strategic environment that has remained nearly constant for more than 30 years, since the 1979 peace accord with Egypt.

Israel is responding to this uncertainty, and to other regional challenges, through its new multiyear defense plan. Designated “Halamish” (firestone), the plan covers such emerging concerns as potential threats from the so-called “Arab Spring,” ballistic missile defense (BMD), cyberwarfare, the strategic necessity of protecting offshore natural gas fields and an expanding role for the navy, as well as conventional issues of tactical mobility, force projection and maneuver warfare.

The former Israel Defense Forces (IDF) chief of General Staff, Lt. Gen. Gabi Ashkenazi, remarked at the annual Herzliya global policy conference near Tel Aviv in February that Israel's defense doctrine must change to meet the challenges of the Arab Spring. A major influence on the new IDF multiyear plan is the dramatic change in Egypt. As events unfold there, the possibility that the Muslim Brotherhood or more radical Islamic elements might gain influence in any Egyptian government threatens the peace treaty with Israel.

The new chief of General Staff, Lt. Gen. Benny Gantz, is taking a cautious approach to Egypt, with good reason. Although popular voices in Egypt have expressed discontent with Israel for years, it is doubtful that a future government will revert to a military campaign against Israel. Two elements will influence thinking in Cairo. The first is that Israel remains the best-equipped military force in the Middle East, having highly advanced long-range precision weapons combined with 24/7 space- and ground-based surveillance that can detect any military movement through the Suez Canal for deployment in the Sinai Peninsula. Moreover, the IDF's new permanent redeployment into the southern Negev desert, on the eastern flank of the Sinai, should allow rapid movement of armored forces to seize strategic mountain passes long before any Egyptian force could get there.

The second reason concerns a major strategic asset: Egypt's defense capabilities have been underwritten by U.S. military aid to the tune of $1.3-1.5 billion per year since 1979. This money has rebuilt the Egyptian armed forces with advanced Western arms and training. Not only will this assistance depend on Egypt maintaining its peace agreement with Israel, but should a radical leadership opt for hostilities, it might lose its ordnance in a futile and costly mobile desert war, in which the IDF has always excelled. Long gone are the Soviets, who replaced Egypt's arsenal twice, in 1967 and 1973.

The Egyptian military is one of the largest and best-armed in the region. The air force has more than 400 fighter jets and nearly 100 helicopter gunships. The armored corps has 3,600 tanks, including the U.S. M1 Abrams, manufactured in Egypt. The army has 1,600 artillery guns and a large inventory of surface-to-surface missiles.

In principle the Halamish multiyear plan continues the IDF's doctrinal approach as laid out in the Tefen plan, but may contain another focal point. While both plans identify Iran as the greatest threat to Israel, followed by the northern front—which includes Syria, Lebanon and the Palestinians in Hamas-ruled Gaza—Halamish includes two more potential threats—Egypt and the West Bank, should a hostile Palestinian state that includes Hamas be created by a United Nations vote in September.

Where the Halamish plan deviates from Tefen is in the following assessment, which serves as the introduction of the new multiyear plan: “There is an increasing probability of conflict on multiple fronts.”

While this is not a new concern for Israel, it is significant when it appears in a military multiyear plan for the first time in 15 years. Moreover, two relatively new components are envisioned as strategic aspects: the threat to Israel's rear—especially the dense urban environment along the coast—and to strategic installations. Another item gaining priority is offensive and defensive cyberwar.

A major portion of the Halamish budget will be allocated to intelligence assets and space observation for real-time advanced-warning capabilities. The high-resolution TecSar satellite, which features radar imaging, transmits images at night and in poor weather. TecSar overflies areas of interest once every 90 min. But the air force wants enough satellites aloft to keep the Middle East covered so there would be no spot where Israel cannot see what's going on every 15 min.

According to the latest intelligence estimates, Hezbollah's arsenal consists of 40,000 rockets, ranging from standard 122-mm Katyushas to the medium-range Fajr-3 and -5, and Zelzal long-range rockets that could reach deep into Israeli territory. Recent firings of Grad rockets by Hamas from Gaza targeted the outskirts of the Ashdod port, and there are unconfirmed reports of longer-range rockets in its arsenal.

Counter-rocket, artillery and mortar (C-RAM) and ballistic missile defense (BMD) is another realm that receives major attention in the plan, gaining high priorities in funding from local and U.S. sources. The IDF is accelerating acquisition of more Iron Dome C-RAM batteries, with a third scheduled later this year and four more expected in 2012, probably procured with $200 million of U.S. funding. Increased efforts are also envisioned in the development of the David's Sling medium-range missile defense system and the exoatmospheric Arrow-3 BMD system, which will enhance the multilayer Homa missile defense including operational Arrow-2 batteries.

In Halamish, the IDF will continue procurement of the Namer armored personnel carrier, which is based on the Merkava Mk 4 tank chassis, as well as outfitting new and existing Merkava Mk4M tanks with the Trophy active defense system. Should the threat of a high-intensity conflict with Syria and Egypt prove credible, this would require upgrading the army's order of battle and accelerating production in these areas, through additional funding that could be requested. There is also a provision in Halamish to enhance infantry battalions with new, locally developed capabilities that make the soldier more lethal and improve his survivability on a battlefield.

A major plan to upgrade capabilities is also envisioned for the artillery corps, which is regarded as a prime element in high-intensity combat. Substantial investments are planned to increase the extended-range, precision multiple-launch rocket system batteries for deployment on the Golan Heights. Other precision weapons for artillery could include the Rafael Spike extended-range and non-line-of-sight missiles. Such weapons could enhance long-range engagements in the Sinai desert.

In the coming year, the IDF will finalize a new multiyear plan for hardening critical infrastructure, which could be exposed to cyberattack. The importance Israeli decision-makers allocate to cyberwar was emphasized by Deputy Prime Minister Dan Meridor recently at a Jerusalem think tank. “Because highly lethal war is difficult, one looks for other ways. One of those other ways is the intelligence community all over the world trying to do things that don't look so ugly [and] do not kill people.” Meridor declined to discuss the Stuxnet virus found in Iranian computer networks last year, but his remarks underscored Israel's efforts to enhance capabilities in this area. Over the past two years, officials have quietly unveiled cyberwar capabilities that are now a core pillar of defense strategy.

In coming months, Gantz will decide if the Israeli navy receives funding to purchase two missile ships. Procurement of the ships was approved in 2007 ahead of the outgoing multiyear plan, but the soaring cost of the U.S. Littoral Combat Ship—the vessel Israel wanted—caused the IDF to postpone the purchase.

Recent developments give the navy a new set of priorities. So far, 50% of Israel's natural gas is received through a contract with Egypt. However, two explosions on the Sinai pipeline severely interrupted supplies and placed this source in question. The recent discovery of the Leviathan natural gas field, 135 km (84 mi.) off the Israeli coast, the world's biggest deepwater gas find in a decade, promises billions of dollars in revenue for decades. North of that site is Tamar, where drilling over the past year has yielded signs of considerable reservoirs. The sites will eventually supply 70% of Israel's energy needs for electricity. As such, they will be designated strategic assets that require protection.

The navy is looking at the possibility of building the two ships it wants at Israel Shipyards in Haifa, from a German design. Navy officials estimate the initial cost of the plan at $55 million, but that is expected to increase substantially.

Navy planners say a major investment in maritime reconnaissance and monitoring systems is inevitable. The navy will also have to procure specialized vessels and allocate personnel to secure dozens of natural gas facilities, including rigs, underwater cables and temporary exploration sites.

Much of the implementation of the multiyear plan will depend on procurement of the F-35I Joint Strike Fighter. Although funding will be through U.S. military assistance, Israel will still pick up substantial costs. There is already talk of cheaper alternatives—e.g., purchase of a squadron of F-15s from the U.S. Air Force.