Will ending US military aid make Israel stronger or more vulnerable?

​A new defense memorandum of understanding between the United States and Israel that would wean Israel off its foreign military funding (FMF coupons) could give Israel greater decision-making independence when it comes to defending itself and acting against threats, according to Dr. Raphael Ben Levi, a senior research fellow at the Misgav Institute and director of the Churchill Program at the Argaman Institute.

​Today, the playing field between Israel and the United States is skewed, he explained, as reports that negotiations over the MOU will begin this month were published last week. 

It is skewed because Israel is the client of American largesse, meaning the United States provides Israel with funding to purchase defense tools from American companies.

“We would ideally like to minimize the amount of leverage that future administrations might hold over Israel and its decision on how to defend itself,” Ben Levi said. “This will fortify Israel in the long term against various political changes that might come over the next decade or so. It will take Israel outside of the day-to-day political debate, and instead plug it into America’s ecosystem as a more integrated ally that serves America’s interests in a much clearer way.”

​In January 2026, Prime Minister Benjamin Netanyahu announced plans to wean Israel off American military aid and shift more toward joint US-Israel ventures. In addition, the prime minister recently announced an additional NIS 350 billion over the next 10 years to secure military self-reliance. Last week, Israeli media reported that US-Israel negotiations would start this month.

​The existing MOU between Israel and the United States went into effect in January 2019 and runs through the end of 2028. The next MOU is expected to be negotiated this year and go into effect in January 2029.

​The first major MOU for military aid to Israel was signed in 1998 under the Clinton administration and provided a $21.3 billion package. A second 10-year MOU was signed in 2007 for $30 billion, and a final one was concluded in 2016, beginning in 2019, committing a minimum of $3.8 billion annually.

​However, US military aid has been steady for decades and accounted for a much higher proportion of Israel’s defense budget in earlier years. Over time, Israel’s GDP has grown significantly. According to Ben Levi, the idea of a phase-out has always been on the table.

​The discussions need to take place now so that decisions on next steps are in place when the current MOU expires. Although Ben Levi said Israel could negotiate year to year, it is preferable to avoid that approach.

​The negotiations are less about military support and collaboration, which are expected to continue between the two countries, and more about enabling Israel to independently buy and manufacture the weapons and munitions it needs. The goal is to bring more of the production line in-house.

​Ben Levi explained that over the course of nearly three years of war, Israel has used up a large portion of its stockpiles. As a result, the IDF is now seeking to rearm. The goal is for Israel to be able to do this independently. The question, however, is whether once these weapons are produced and Israel has resupplied itself, it will want to maintain such robust production lines. He noted that Israel previously shut down much of its domestic production capacity because, with FMF vouchers, it was more convenient to purchase equipment from the United States than to place orders with Israeli companies years in advance.

​At the same time, more than $3 billion in annual FMF is spent in the United States, with Congress allocating taxpayer money to provide Israel with resources or equipment. According to Ben Levi, this dynamic can create vulnerabilities for Israel.

​Separately from FMF, about $500 million is earmarked for cooperative air and other defense programs. A large portion of that funding goes toward research and development of systems such as Iron Dome. Israel also contributes its own funding, and the intellectual property developed is shared.

​“That's not really an aid model at all,” Ben Levi said, noting that this model is expected to continue.

​He added that increased defense spending, while it may come at the expense of other government ministries, will not destabilize Israel’s budget and will ultimately strengthen the country’s security.

​Recent developments have underscored the risks of dependence. 

In May 2024, earlier in the war against Hamas, the Biden administration delayed the delivery of certain weapons to Israel as it sought to pressure the IDF over operations in Rafah. More recently, some 40 out of 47 Democrats in the Senate moved to block arms sales to Israel, although this was overcome.

​“It would be preferable to be less dependent,” Ben Levi added.

​The phase-out is not expected to happen overnight. According to a Calcalist report, it could take as long as 10 years.

​Ben Levi noted that the shift also reflects a broader strategic change. Previous MOUs were often signed in the context of Israel agreeing to assume additional security risks. One example is the large MOU signed under the Obama administration following the United States’ decision to enter the Joint Comprehensive Plan of Action (JCPOA) with Iran, which Israel argued increased its security risks.

​“It's always been in the context of balancing out Israel assuming more security risks,” Ben Levi said. “These are ideas that no longer hold water because at the moment Israel is unlikely to agree to any of these security risks.”

For example, there had been discussions around normalization with Saudi Arabia that could include a pathway to a Palestinian state. However, the current Israeli administration has ruled out such a scenario and is unlikely to accept conditions that could allow hostile forces to build up along its borders.

​As negotiations begin, Ben Levi said he believes the outcome will ultimately strengthen Israel’s position.

​“Phasing out the aid would have a beneficial effect on Israel's broader national security and its ability to defend itself,” he concluded.