The nonlinear Schrodinger equation which governs the dynamics of two-dimensional spatial solitons in Kerr media with periodically varying diffraction and nonlinearity has been analyzed in this paper using variational approach and numerical studies. Analytical expressions for soliton parameters have been derived using variational analysis. Variational equations and partial differential equation have been simulated numerically. Analytical and numerical studies have shown that nonlinearity management and diffraction management stabilize the pulse against decay or collapse providing undisturbed propagation even for larger energies of the incident beam.