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The U.S. and Israel Are Reportedly Close to Signing a 10-year Defense Aid Deal

Amid the noise of the American presidential election, the U.S. and Israel are working out a Memorandum of Understanding—a small breakthrough in a countries’ fraying relationship

Armin Rosen
July 26, 2016
Olivier Douliery-Pool/Getty Images
U.S President Barack Obama (R) meets with Israeli Prime Minister Benjamin Netanyahu in the Oval Office of the White House in Washington, D.C., November 9, 2015. Olivier Douliery-Pool/Getty Images
Olivier Douliery-Pool/Getty Images
U.S President Barack Obama (R) meets with Israeli Prime Minister Benjamin Netanyahu in the Oval Office of the White House in Washington, D.C., November 9, 2015. Olivier Douliery-Pool/Getty Images

One of the decade’s most important developments for the U.S.-Israel relationship could take place in the coming days. On Monday, Israeli Prime Minister Benjamin Netanyahu announced that he was sending the head of Israel’s National Security council to Washington on July 31, possibly to sign a long-awaited 10-year Memorandum of Understanding (MoU) on U.S. military aid to the country. The deal would outline some $40 billion in U.S. military assistance to the Jewish state, and serve as perhaps the most representative document of the continuous depth and closeness of the strategic ties between Washington and Jerusalem.

This would be the third such MoU signed between the two countries. As with most other U.S.-Israel matters during Obama’s presidency, the MoU negotiations, which have dragged out for nearly a year, are not without controversy. Israel wanted as much as $5 billion in annual aid, and the continued ability to spend substantial amounts of the aid package within Israel—which is more than the White House was apparently willing to give them. In April, The New York Times reported that Netanyahu and President Obama were “deeply at odds” over the size of the aid package, which could be worth around $40 billion in total. But now, against the backdrop of a chaotic U.S. presidential election cycle—and in light of the basic dynamics at the heart of the U.S.-Israel relationship—the MOU issue might be heading to an abrupt resolution.

The MoU is important to both the U.S. and Israel’s strategic long-game. American military aid to Israel, Egypt, and Jordan—which accounts for some 81 percent of the U.S.’s Foreign Military Financing budget—is considered one of the cornerstones of regional stability, while the U.S. is unlikely to see movement from the Israelis on the Palestinian issue unless Jerusalem is convinced that the U.S. is still committed to Israel’s long-term military superiority over its neighbors. The MoU has the added benefit of restraining Israel by essentially codifying the cost of acting radically opposite to the U.S.’s strategic interests.

For Israel, the MoU is vital to long-term planning in a time of proliferating threats to the country. Israeli leaders do not seem to think that last year’s U.S.-backed nuclear deal with Iran will prevent Tehran from obtaining a nuclear weapon, nor do they expect to be able to totally avoid conflict with the Iranian proxy Hezbollah, which reportedly had 150,000 rockets in its arsenal as of last November. Throw in ISIS, Syrian jihadist groups, Hamas, and the unprecedented flow of advanced conventional weapons to potentially unstable regional neighbors that do not recognize Israel’s right to exist, and it’s clear why Israel wants to be able to chart out its defense spending a decade into the otherwise-uncertain future.

Israel and the US signed 10-year MoUs in 1998 and 2007. This particular MoU has its own especially fraught context. The U.S. wants to reassure Israel in the wake of the Iran nuclear deal, which Netanyahu strenuously opposed. Obama wants to cement his pro-Israel legacy, prevent support for Israel from being co-opted as a partisan issue, and possibly give himself political cover for launching a last-ditch attempt at reviving the Israeli-Palestinian peace process. Netanyahu is aiming to end the Obama presidency on a high note, after eight years of almost non-stop backbiting with his American counterpart.

Overall, the countries want to restore some functionality to a souring relationship. As Michael Koplow, the policy director of the Israel Policy Forum, explained, there is “a desire on Israel’s part to do this with the current administration as a way of making a statement that the U.S. commitment to Israel’s security is a bipartisan cause, and that it transcends the personal differences between Obama and Netanyahu.”

Still, the negotiations have dragged on for awhile. While the Israeli and U.S. defense establishments have a solid mutual understanding of exactly what weapons systems Israel would be allowed to procure under the MoU, the sides differed on the size of the total aid package and on a crucial political question. Under previous MoUs, Israel could spend as much as 26 percent of the U.S.’s annual aid package domestically, as a way of building an arms industry that could aid in the country’s long-term national defense. The U.S., which wants to maximize the domestic economic benefits of the aid package, and might see little need to help the defense industry of one of the world’s 10 largest weapons exporters, is seeking to eliminate Israel’s in-country spending privilages entirely under the next MoU. According to a May report in Haaretz, it’s possible the sides will reach a compromise, with the next MoU gradually phasing out in-country spending.

In spite of the delays, the MoU negotiations are also taking place against a nerve-racking political backdrop—something that helps explain why the talks may be wrapping up so soon. Each country has a number of reasons to want to get the talks over with.

Both sides might want to end the political annoyance of a recent controversy over U.S. funding for Israeli missile defense. Last month, the White House threatened to veto a defense appropriations bill if it included $455 million more for Israeli missile defense than the administration’s funding request. As Nadav Pollak, a Middle East analyst and former fellow at the Washington Institute for Near East Policy explained, the White House is keen on ending any possibility of the U.S. Congress functioning as an alternative means of hashing out military aid packages for Israel. “The administration wanted to make sure Israel would stop these sort of parallel negotiation channels with Israel and Congress about missile defense,” Pollak said.

And then there’s the presidential election. The general election season began with the Republican and Democratic Parties issuing starkly different official platform language related to Israel and the Israeli-Palestinian conflict. As Pollak explained, Netanyahu might want to wrap up the MOU talks before they can become a talking point for either party. “Netanyahu is probably a little concerned that the MOU will start to become a political issue,” he said.

Above all, the Israelis might simply understand that they have nothing to gain from dragging the negotiations out any longer. As Koplow says, there’s “a realization on Israel’s part that the U.S.—irrespective of who is president—is not going to back down on its insistence that the aid be spent entirely in the U.S.,” along with a sense that “the uncertainty that not signing the MOU is causing is harming Israel’s defense posture and strategic planning.”

The MOU signing could restore some kind of normalcy to a relationship that’s frayed under the current Israeli and American leadership. Neither Netanyahu nor Obama want the permanent alienation of an important partner to be a part of their foreign policy legacy. If the aid package is finalized next week, it would show that the strategic fundamentals of the alliance are still sound—even if some of the most basic aspects of the U.S.-Israel relationship are producing more controversy and ill-feeling than they used to.

Armin Rosen is a staff writer for Tablet Magazine.

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