US, Israel set to hold talks on next decade of defense agreement as political pressure grows to end military aid to Israel

Official talks between Israel and the United States regarding a new Memorandum of Understanding (MOU) for U.S. security assistance to Israel will begin next month, as American aid to Israel has become a political hot-button topic. 

Israeli Defense Ministry Director-General Amir Baram will lead the Israeli team, alongside Israeli Ambassador to the United States Michael Leiter and representatives of the Defense and Finance ministries, the IDF, and the National Security Council (NSC). 

The U.S. side will be led by Secretary of State Marco Rubio, senior advisor Michael Needham and U.S. Ambassador to Israel Mike Huckabee. 

According to economic news site Calcalist, the start date for the talks was set during Baram's visit to Washington last month. The talks will focus on the model for U.S. security assistance to Israel during the decade between 2029 and 2038. 

There is interest on both sides in gradually reducing U.S. aid to Israel, as the issue has become a point of political contention in both countries. 

The current memorandum, under which Israel receives approximately $3.3 billion annually, along with other defense aid, is set to expire in about two and a half years.

U.S. aid to Israel in the first few decades of the state was largely economic aid, designed to enable the fledgling state to overcome the economic isolation imposed by hostile Arab neighbors. 

Later, as the U.S. recognized the strategic significance of Israel’s position in countering Soviet attempts to gain influence in the Middle East, Washington signed the first MOU on strategic cooperation in November 1981.

While the first memorandum focused largely on military cooperation, it also included discussions on research and development and defense trade, which became the basis for later agreements. The defense spending agreements established following the first MOU have largely been for ten-year periods and have focused on the concept of a Qualitative Military Edge (QME), ensuring Israel’s military advantage over its regional adversaries.

The current MOU was signed at the end of former U.S. President Barack Obama's term in 2016 and came into effect in 2019. As part of that agreement, the U.S. has provided Israel with security assistance totaling $38 billion per decade, which was divided as $33 billion in grants to buy military equipment and $5 billion for missile defense systems, such as Iron Dome, David’s Sling, and Arrow 3.

The aid has largely required Israel to purchase defense products from American companies and to collaborate with them when developing its own systems.

The outline of the new MOU is expected to differ significantly from the current one, which expires at the end of 2028. It is also expected to serve as preparation for Israel’s complete withdrawal from U.S. aid when it expires in 2038.

The amount of financial assistance the U.S. will provide to Israel for defense purchases is expected to gradually decrease each year, but R&D cooperation is expected to continue, or even increase. 

Next month's negotiations will reportedly set the terms for the amount of aid Israel will receive, the schedule of aid dispersal, and how the aid can be used.