Talks over US aid to Israel stall over missile shield, defense industry preferences

© Baz Ratner
Negotiations between the US and Israel over a new military aid package have hit a snag: While Israel demands dedicated missile defense funding, Washington insists US defense contractors should benefit more from the deal, according to leaks from officials.

The current aid package amounts to $30 billion, and is set to expire in 2018. Israel is asking for almost $10 billion more from the new arrangement. Washington is offering a smaller increase, while insisting that the greater share of the aid – and eventually all of it – be spent on purchases from US defense contractors rather than domestically, Reuters reported, citing several US and Israeli officials speaking on condition of anonymity.

Part of the increase requested by Israel would be ensuring a dedicated stream of funding for the missile defense systems, currently funded by ad-hoc resolutions of the US Congress, separately from the military aid package. Israel is asking for at least $3.7 billion a year under the new memorandum of understanding (MOU), officials told Reuters.

Last month, the White House said that its proposal was the “largest single pledge of military assistance to any country in US history,” without specifying an amount. According to officials that spoke to Reuters, the US counter-offer has been between $3.5 and $3.7 billion per year, but it was not clear whether this included any money for missile defense. Washington reportedly offered $4.5 billion a year in July 2015, following the nuclear deal with Iran that Israel remains opposed to.

However, US President Barack Obama wants to ensure that more of the aid is spent on US-made weapons, according to officials who spoke to Reuters. The current arrangement allows Israel to spend 26.3 percent of the aid on its own defense industry, amounting to some $800 million a year. Washington wants to gradually phase out that provision, so that by the end of the 10-year term all of the funds would go to US defense contractors instead.

The Israeli defense industry actually manufactures and sells several advanced systems to the US, such as the Litening precision targeting system and technology used in the Joint Helmet-Mounted Display system for F-22 fighter pilots, according to Wired. Israel’s cozy relationship with the Pentagon also means the country will be the only buyer of the F-35 Lightning II jet allowed to modify the pricey, next-generation fighters and service them locally, the magazine reported.

In official statements to Reuters, both the US and Israel have said only that the talks were ongoing and refused to offer any details. The agency’s revelations come as Israel celebrates Independence Day (Yom Ha’atzmaut).

Meanwhile, Israeli media report that the Republican presidential candidate Donald Trump is expected to visit the country after locking up the nomination at the party convention in July. Trump campaign officials have shrugged off the rumors.  

Though the billionaire businessman has pledged his friendship and support to Israel, one of Trump’s top foreign policy advisers, Jeff Sessions of Alabama, was among the 17 Senators that did not sign last month’s letter urging the White House to increase military aid to the Jewish state.