Two women wait for a flight at Ben-Gurion airport on Tuesday

The Israeli trade union movement has scaled back a nationwide strike after two days of industrial action.

Following the intervention of Israeli President Moshe Katsav, the Histadrut labour federation has agreed to call off parts of the strike until the end of Independence Day next Wednesday.

Ben-Gurion International Airport re-opened on Thursday evening and seaports are expected to resume operation on Sunday.

Meanwhile, schools, banks, public transport, post offices and municipal offices are also set to open their doors again on Friday.

Government offices, however, will remain closed.

The general strike, which began on Wednesday, brought the country grinding to a halt, after 700,000 public sector workers shut down much of Israel's infrastructure.

Stand-off

The strike was called after Finance Minister Binyamin Netanyahu unveiled 10% cuts across the board for ministry budgets.

Peretz argued that we should reduce it and give talks a chance again Histadrut spokeswoman

The government also plans to cut one in 10 public sector jobs, and change a number of pension conditions, including the retirement age.

Although Mr Netanyahu said the plan was necessary to kick-start Israel's crisis-hit economy, Histadrut secretary general Amir Peretz accused him of "acting like a dictator" earlier in the week.

However, the intervention of President Katsav has also secured an agreement by Mr Peretz to resume talks with the finance ministry on Friday morning.

"The heads of the workers' committees wanted to continue with an all-out strike but Peretz argued that we should reduce it and give talks a chance again," said spokeswoman Dana Avidor.

Budget cuts

The Israeli parliament approved Mr Netanyahu's Budget cuts during a first reading on Wednesday, but the bill faces two more readings before becoming law.

The strike has cost the economy

Unions have complained that the finance ministry is attempting to force through the legislation rather than take the more traditional route of a collective agreement with the once all-powerful unions.

Business leaders have estimated the national strike - the first since 1997 - would have cost the country 400m shekels (�55m; $88m) a day during the first two days.

It comes during Israel's worst recession in 50 years, following a global economic slowdown, the crash in technology and telecoms spending and the Palestinian uprising.

Histadrut is threatening to resume the strike after Wednesday if no progress has been made in the talks.