Israeli lawmakers passed an annual budget Wednesday with controversial allocations for ultra-Orthodox Jews, in a concession to a religious party in the governing coalition that drew protests from the opposition.

Thousands of Israelis marched through Jerusalem on Tuesday to demonstrate against the government's plans to hand more cash to the ultra-Orthodox minority, accusing the coalition of "looting" state funds.

Earlier this week, Prime Minister Benjamin Netanyahu announced the state would grant married ultra-Orthodox Jewish men engaged in religious study rather than work a total of 250 million shekels ($67.5 million).

The grant was part of an agreement with United Torah Judaism, one of the ultra-Orthodox parties in the coalition, to ensure its support for the budget.

The extra funds are in addition to other budget allocations traditionally made to the ultra-Orthodox through various government ministries.

The 2023-2024 budget was ultimately passed early Wednesday with the support of all 64 coalition lawmakers in the 120-seat parliament.

Netanyahu and his allies -- who took office in December -- stood and clapped as the outcome of the vote was announced.

"We won the elections, we passed the budget, we'll continue for four more years," Netanyahu wrote on Facebook.

- 'Endless extortion' -

The premier spent recent weeks cutting deals with his ultra-Orthodox and extreme-right coalition partners, to meet a May 29 deadline to pass the budget or face fresh elections.

The cash handouts to the ultra-Orthodox have sparked anger as Israelis of all backgrounds contend with soaring prices and increased interest rates.

In the Tel Aviv suburb of Ramat Gan, high-tech worker Sivan Aharon said: "It's sad that the taxes we pay are not redistributed to us.

"This money can be used to help the weakest populations, the soldiers, to go to health and education," the 38-year-old told AFP.

Opposition chief Yair Lapid said the budget amounted to "endless extortion" which failed to address the high cost of living.

"While you were sleeping, the worst and most destructive budget in the history of the country passed," the former premier wrote on Facebook.

Asher Blass, a professor of economics at Ashkelon Academic College, said Israel needed more "growth engines" rather than "transfer payments" to ultra-Orthodox institutions that effectively discourage higher education.

Speaking ahead of the parliamentary vote, he told AFP "the trajectory is not good" but Israel has seen worse budget deficits.

In February, the Bank of Israel estimated the deficit would be close to one percent of gross domestic product in 2023 and 2024.

The protest on the eve of the budget vote came amid a wave of demonstrations against the Netanyahu administration, focusing largely on its bid to overhaul the judicial system.

Weekly rallies held in Tel Aviv have regularly drawn tens of thousands of people, who oppose moves to hand more powers to politicians and weaken the Supreme Court.

The demonstrations in Israel's financial hub and elsewhere across the country have continued, despite the government pausing the judicial reform package following a general strike in March.

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