Benjamin Netanyahu has been accused of trying to deflect anger over his handling of the Covid-19 pandemic by proposing cash handouts for all Israelis.
The Israeli prime minister had presented a 6bn shekel (£1.4bn) package on Wednesday night, which included payments of up to £175 for individuals, rising to nearly £700 for families.
He argued it would boost spending and “get the economy moving faster”.
But the move, which needs cabinet approval, was rejected on Thursday by senior officials, including government ministers.
They argued the money should instead be targeted at Israel’s poorest citizens.
The Bank of Israel governor, Amir Yaron, told local radio that there were “more effective ways” to encourage consumer spending.
And foreign minister, Gabi Ashkenazi, from the Blue and White party, said the money should go “to those who are hurting and not to those who don’t need it”.
On Thursday the Israeli PM said he had told a cabinet meeting he was “making every effort” to avoid another full lockdown in the country.
He said he would give ministers one week to work on proposals for a “safe opening” of the economy.
More than one in five Israelis are unemployed and many businesses say they will close as a result of the pandemic.
