Israeli Prime Minister Benjamin Netanyahu has approved funding for the National Cyber Bureau (NCB), the government announced in a statement released Thursday.

It did not divulge the amount that was allocated, but said the agency is drawing up plans for a national cyber situation room, which will provide government organizations with threat assessments, and is working to increase state regulation of information security.

Established earlier this year to ensure the protection of Israel's critical civilian and military networks against cyber threats, the NCB has been tasked with establishing a national cybernetic defense concept.

Dr. Evyatar Mataniah, the NCB director, said the agency is also seeking to promote cooperation with the local cybernetic industry and with international organizations, to enable Israel to comply with international treaties.

Israel's growing dependence on digital networks for daily banking, energy production and military operations has made cyber security a top national security issue, with government and military agencies working to identify vulnerabilities in the nation's critical systems.

Speaking at a conference on cyber warfare at Tel Aviv University on Wednesday, Defense Minister Ehud Barak said Israel is striving to become a world leader in the development of cyber capabilities.

"We are working to be a world leader in this field -- in the defense establishment and in the civil sector," The Jerusalem Post quoted Barak as saying.

"Cyber warfare has taken asymmetric warfare to a new height, allowing a lone hacker to cause major damage," he said.

His remarks came days after the Israeli officially acknowledged that it uses cyberwarfare for offensive military operations, in a posting on its official website on Sunday.

According to the posting, such operations include collecting intelligence information and attacking enemies. The army also revealed that its Operations Directorate has recently drafted a document defining the purpose and use of cyber warfare.

"Professionally speaking, the Israel Defense Forces is fighting consistently and relentlessly in cyberspace, is collecting intelligence and protecting the army's networks as well ... When needed, cyberspace is also used to execute attacks and other information operations," the posting said.

The disclosure came a week after a new and mysterious virus was discovered to have attacked Iran and computerized networks in a host of other countries, widely presumed to have been developed by Israel.

Discovered by Moscow-based Kaspersky, the world's leading information security firm, the "Flame" virus turns every computer it infects into a spy, transmitting screenshots, instant message chats, data files and recorded conversations taking place near computers to its operators.

While Israel kept mum on the matter, Kaspersky said that only a government could have managed a project of this scale.

Eugene Kaspersky, who also attended the Tel Aviv conference, said that a global effort was needed to stop "cyber terrorism."

"It's not cyber war, it's cyber terrorism and I'm afraid it's just the beginning of the game ... I'm afraid it will be the end of the world as we know it," Kaspersky predicted.

He named several nations which he said were capable of developing the Flame virus, among them Israel, but declined to comment on which of them he thought wrote the software.

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