More than 300,000 Israeli government workers are on strike to demand back wages, while the finance ministry wrangles with town councils about charges of overspending. The strike has shut down air and sea ports, banks and government offices during a peak tourist season.

Thousands of holiday travelers were stranded at the airport when the government workers walked off their jobs early Tuesday. More than 80 flights were canceled. Banks, post offices and other government operations are at a standstill after the Histradut Labor Federation launched the strike early in the morning.

Histradut President Amir Peretz rallied thousands of government workers to strike in solidarity with local and religious council workers who are demanding several months worth of back wages. He says the strike is open-ended.

The union has ignored Prime Minister Ariel Sharon's plea for a show of national responsibility. Negotiations to end the strike are underway but no compromise has been offered by either side so far.

The government blames the country's financial crisis for the inability to pay back wages. The finance ministry is demanding that local councils crack down on spending before it agrees to pay their salaries.

The strikers are also protesting the government's economic recovery plan that would lead to massive layoffs and salary cuts.

The work stoppage comes at the start of one of the country's busiest holiday seasons, when tourism is usually high.

The former head of the Manufacturers' Association, Dan Propper, says industry is fed up with what he calls financial mismanagement. "The workers in this case, as it stands, should now go to the court, and I'm sure they'll find justice there," he told Israel Radio.

Mr. Propper said the frequent strikes are forcing some companies to move their operations out of Israel. A 100-day work stoppage last year and a recent port strike also disrupted business operations. "It is very bad for the country's economy," he added. "I know of some exporters who have decided to close their plants in this country and open them in other countries in order to avoid such events again."

Israel's finance ministry estimates the walk-out will cost the economy more than $145 million a day.

Customs and tax offices are closed. So is the stock exchange. Public transport has been disrupted. Hospitals are operating on an emergency basis. Only public schools appear to be operating normally.