Israel Military Industries has avoided a strike over a salary dispute.

IMI workers had threatened to walk off the job unless back salaries were paid.

The breakthrough occurred during lengthy discussions between General Federation of Labor in Israel leaders and company and Israeli government officials.

The General Federation of Labor in Israel is referred to as Histadrut.

Among those in the talks were IMI Chief Executive Officer Avi Felder and Chairwoman Nitza Posner, IMI workers committee chairman Itzik Yehuda, Histadrut, Chairman Ofer Eini, Histadrut Trade Unions Chairman Avi Nissenkoren.

Among the issues under discussion were the restructuring of IMI to accommodate the current workforce in the wake of the retirement of 1,000 employees and the company's planned relocation to the Negev.

IMI, also known as Taas, manufactures armaments, ammunition and military technology primarily for the Israel military and its small arms division enjoys a global reputation and market.

Among IMI's most popular exports are the Uzi submachine gun, the IMI Galil assault rifle, the Negev, IMI's main light machine gun and the Jericho 941 semi-automatic pistol.

The Knesset's Finance Committee approved a $38 million loan to allow IMI to reschedule its debt payments and settle a wage dispute, Ynetnews reported Tuesday.

The dispute arose this month after Israel's Ministry of Finance delayed salary payments as a pressure tactic in ongoing discussions on the company's privatization.

The government's maneuvers led the Histadrut to announce the planned strike after IMI's June salaries weren't paid because of the company's fiscal shortages and the Ministry of Finance's refusal to transfer funds to cover them.

IMI employees asserted that during the discussions designed to protect their rights after IMI is privatized, the Ministry of Finance nevertheless arbitrarily introduced restructuring of IMI even if it wasn't privatized. The restructuring included closing two unprofitable plants.

Nissenkoren said: "Without salaries, negotiations cannot continue. Management must understand that this crosses every boundary."

"We won't resume negotiations without salaries for the employees who work for the security of the country," added Yehuda. "Pig-headed Finance Ministry officials found money to finance the purchase of BMWs for ministers but cannot fund budgets to pay IMI workers' salaries."

"It's unacceptable that every time the employees raise reservations in the negotiations, the Ministry of Finance prevents them from feeding their children," Yehuda said.

Nissenkoren added: "As far as the Histadrut is concerned, non-payment of salaries crosses the red line, which no disagreement in negotiations can justify. It's unacceptable for negotiations to be held under pressures and threats by the Ministry of Finance. We are demanding payment of salaries by law and not as a precondition. Instead of the Ministry of Finance sitting down to solve disagreements, it applies illegitimate pressure against the workers," Globes newspaper reported.