The number of Israelis living below the poverty line last year stood at 1,427,000, some 22.4 percent of the population, according to the National Insurance Institute's poverty report for 2003, released yesterday.

The annual report also showed that more than 105,000 people slid below the poverty line last year. Projections for this year indicate the trend is likely to continue.

"Israel is becoming poorer and poorer," said Dr. Yigal Ben Shalom, the NII director general, during the presentation of the report.

Responding to the new figures, the Finance Ministry defended its policies. It noted that poverty also grew in the 1996-2002 period, though welfare spending then increased by 50 percent.

"The government will continue its policy with the goal of encouraging people to go from handouts to working, while also helping the weaker populations that can't work, first of all the elderly," the treasury statement said.

The figures released in the report set off a wave of virulent criticism of the policies that opponents claim are at fault for the worsening situation. Shas leader Eli Yishai said that "history would judge the government for crimes against its citizens," while former finance minister Avraham Shochat said the "report represents a crushing failure of the government's policy and a socioeconomic disaster for Israel."

According to the report, 139,000 families in which the head of the household is employed live in poverty. In some 17,000 of these families, there are two incomes. The report finds that the number of employed people defined as poor has increased by 12,500, a jump of about 10 percent. This is a sharper rise compared to other groups of individuals classed as poor. The figures also show that around 652,000 children in Israel can be defined as poor, a total of 30.8 percent of the children in the country.

Almost 83,000 of the poor are elderly. Jerusalem is the poorest city in Israel, according to the figures, with some 33 percent of its population living below the poverty line.

People below the poverty line in Israel are defined as having an income of less than NIS 1,763 a month for a single person and NIS 2,777 ($650) for a couple.

Poverty hit more than 360,000 families, or 19.3 percent of the households in Israel. This constitutes a substantial worsening from the 18.1 percent in 2002.

Among Arab households, the poverty rate reached 48.4 percent in 2003. Of single-parent families, 27.6 percent are below poverty line. The head of the Income Tax Authority, Eitan Rub, told Israel Radio that poverty among Arabs was the result of a cultural problem that prevents them from working.

The average income among the poor fell from 70.3 percent of the poverty line in 2002 to 69.5 percent in 2003. The expansion and deepening of poverty were highly affected by the cuts in the wage supplement allowances to the elderly. By comparison, only 12.5 percent of individuals and 10 percent of families are below the poverty line in the United States, and children comprise only 17.6 percent of the impoverished there.

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