Israel faces $10 billion funding gap for US weapons after military aid ends – report

Israel faces an estimated $10 billion funding gap for U.S.-made military equipment already ordered and scheduled for delivery after 2028, when the current U.S.-Israel military assistance MOU agreement expires, according to a report published Thursday by The Wall Street Journal.

The disclosure comes as President Donald Trump has announced that the United States will end its military assistance to Israel by the end of 2026, raising questions about how existing and future defense contracts will be financed.

While Washington has already committed billions of dollars in military assistance, the two governments have not agreed on how to pay for the additional orders scheduled for delivery after the current agreement expires.

According to the Wall Street Journal, a State Department document sent to Congress shows that approximately $10 billion will be needed to cover outstanding Israeli orders beyond 2028.

The figure is based on orders outstanding as of April 1 and it remains unclear whether the United States or Israel will ultimately cover the costs.

The current 10-year MOU provides Israel with $3.3 billion annually through the Foreign Military Financing (FMF) program, along with an additional $500 million annually for joint missile defense programs.

Administration and Israeli officials had already been discussing a gradual phaseout of U.S. military assistance. Reports indicated that Israel favored making the next 10-year memorandum the final one, with reductions introduced gradually over its duration.

Trump's announcement reportedly caught Israeli officials and even some senior aides to the president by surprise.

The future of U.S. military assistance to Israel has also become increasingly contentious in American politics. During the recent election cycle, members of both parties criticized the arrangement and called for it to be reconsidered or ended.

On Wednesday, Vice President JD Vance specifically pointed to the war with Iran and the U.S. relationship with Israel as factors behind the Republican Party's heavy losses in the midterm elections. In a social media post, Vance said voters wanted the war to end and wanted changes to America's relationship with Israel.

The U.S. military assistance arrangement has also been the subject of discussions about a possible transition from direct grants to joint production and development agreements.

A proposal currently being debated in Congress would establish such arrangements through the annual National Defense Authorization Act (NDAA), which is expected to be finalized by the end of the year.

Thursday's Wall Street Journal report included a response provided to Rep. Joaquin Castro (D-Texas) following his request for information from the State Department about U.S. commitments to Israeli defense procurement.

"Even if the MOU ran its full course to 2028, there’s still $10 billion above and beyond that, and there’s an issue of who’s going to pay for that," Castro said.

"It’s not plausible we stop by the end of this year," added Josh Paul, a former senior State Department official familiar with the issue. "We’ve not seen anything yet to substantiate this.”

The State Department did not respond to a WSJ request for comment.

U.S. law also obligates the government to ensure that American arms exports maintain Israel's "qualitative military edge" over its regional rivals.

American defense industry officials have long supported continued cooperation with Israel's Ministry of Defense, in part because the partnerships give U.S. manufacturers access to Israeli-developed technological upgrades for existing weapons platforms, which can then be incorporated into new models.

Meanwhile, Israel is facing growing pressure on its own defense budget. Recent announcements have indicated that significant cuts to education, healthcare and law enforcement budgets may be necessary to help finance military equipment purchases in the coming years. Those warnings came even before Trump's announcement that U.S. military assistance would end.