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Israel's parliament approved a $29 billion austerity budget Thursday but shelved a vote on controversial payments for Jewish settlements, religious institutions and ailing kibbutz collective farms. Left- and right-wing partners in the government agreed to approve a lump sum for 1989-90 and argue details later.

The budget cuts food and transport subsidies, reduces the number of state employees by 3 percent and makes other economies in a bid to slash inflation to 10 percent.

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Inflation has stood at 21 percent in the past 12 months.

Finance Minister Shimon Peres said money for the disputed programs could be taken from $1 billion budgeted as a reserve for unforseen requirements.

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