Israeli Prime Minister Benjamin Netanyahu will hold a round of crucial talks with coalition members starting Tuesday, in a final attempt to pass the 2013 budget.

If Netanyahu fails to reach an agreement within his 66-member coalition, the Knesset (parliament) would be dispersed and elections take place next January or February, instead of October, 2013.

The debate about the 2013 budget proposal, which calls for a NIS 14 billion (3.5 billion U.S. dollars) worth of cuts in government ministry spending, kicked into high gear in the past month.

Netanyahu, along with Finance Minister Yuval Steinitz, in recent months has imposed an austerity plan due to Israel's slowing economy and low tax revenues, in hopes of reaching a three- percent-of-GDP deficit target.

Senior officials close to the prime minister told the Ynet news website they believed Netanyahu would announce early elections on October 15, at the opening of the Knesset's winter session.

Netanyahu, who has already held meetings with senior coalition partners including Defense Minister Ehud Barak and Foreign Minister Avigdor Lieberman, is set to hold talks with ultra- orthodox parties, although sources said there was "no chance" of settling the differences regarding the budget.

The main issue at the heart of the budget discussions held in recent weeks is how to squeeze between 13 and 15 billion shekels ( 3.23-3.73 billion U.S. dollars) worth of cuts to ministry spending.

The cuts will include slashing funding for education and infrastructure, and are expected to stir up significant public opposition, particularly among members of the ultra-orthodox parties.