Israel effectively shut down as the country's main trade union federation launched an open-ended strike to protest the government's planned budget cuts.
The walkout shut down air traffic, ports, schools, the Tel Aviv Stock Exchange (search), banks, the postal system, public transportation and government offices as of 6 a.m. Wednesday.
Talks between the union and the Ministry of Finance broke down Monday over the government's proposal to cut $2.4 billion from the government's $45 billion budget.
The government claims that the cut is necessary to curtail a widening deficit, which some analysts claim could reach 6 percent of the gross domestic product in the current fiscal year.
Israel's economy has been hard hit by 31 months of Israeli-Palestinian fighting and the downturn in the high-tech industry.
Schools were closed because of the strike, hospitals were working on holiday footing, welfare services shut their doors and garbage was expected to pile up as municipal workers stayed home. National parks and public cultural institutions also joined the strike.
Pandemonium broke out at Ben Gurion International Airport, with travelers shouting and pushing as they tried to move up their flights and leave the country before the strike kicked in. No flights were entering or leaving the country.
One of those affected was President Moshe Katsav, currently on a visit to Poland. His office said it was not yet clear if Katsav would be able to return home.
Israelis lined up to withdraw money from automatic teller machines before they ran out of cash. Gas shortages were expected if the strike lasts more than a few days.
The Histadrut (search) trade union federation is especially up in arms over the Ministry of Finance's plan to overturn collective-bargaining agreements by firing public sector workers and trimming their salaries.
The Israeli legislature was expected to approve the cuts later Wednesday.
Finance Minister Benjamin Netanyahu (search) was jeered by the opposition as he presented the plan to lawmakers, warning of dire consequences if unemployment is not reduced and the financial crisis is not brought under control.
Netanyahu called on the unions to end the strike, saying it was causing "terrible suffering to the people."