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.

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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