Participants at the March for Israel in Washington DC, November 2023 (photo: Rena Schild)
Beyond Military Aid: A Concrete MOU Proposal
by Dr. Raphael BenLevi
A Framework for U.S.-Israel PostAid Strategic-Industrial Cooperation
Beyond Military Aid: A Concrete MOU Proposal Dr. Raphael BenLevi | June
2026 Participants at the March for Israel in Washington DC, November
2023 (photo: Rena Schild) Main Points
• Israel’s strategic role has evolved from aid recipient to full U.S.
partner.
• The current aid-based framework no longer reflects this reality.
• A post-aid model should strengthen, not weaken, the U.S.-Israel
alliance.
• Israel should gradually assume full responsibility for funding its own
defense.
• The United States and Israel should deepen technological, industrial,
and operational cooperation.
• The new framework should include supply guarantees, joint production,
futuredefense technologies, and broader regional integration.
• The paper concludes with concrete proposed language for a new MOU and
accompanying Letter of Intent.
Introduction Israel’s newfound status as strategic partner of the United
States in the Middle East, as exemplified by the unprecedented
cooperation during operations Epic Fury/Rising Lion, stands in stark
contrast with the current framework for defense industrial cooperation,
centered around military aid grants. An emerging consensus in both
Washington and Jerusalem views the aid as anachronistic and seeks
changes that will bring it into alignment with Israel’s role as a full
strategic partner. An independent Israel that can decisively defeat its
enemies and fund its own military will be a valuable asset and model
ally.
As the two countries are in the process of discussing the parameters of
a new MOU, they should approach it as a process of evolution. This paper
identifies a) aspects of the current model that continue to serve the
relationship well and should be maintained; b) aspects which are no
longer in their mutual interests and should be updated; and c) new
elements that should be incorporated to realize their full potential as
partners.
The transition away from American military aid should not be understood
as a weakening of the U.S.-Israel relationship but as the natural
evolution of a partnership that has matured over decades. Israel’s
growing economic and military strength allows it to assume greater
responsibility for its own defense while contributing more meaningfully
to shared strategic goals. The guiding principle should be Israeli
independence in funding and capability alongside greater integration in
strategy. By replacing an aid-based structure with deeper technological,
industrial, and strategic cooperation, Washington and Jerusalem can
build a relationship better suited to the geopolitical realities of the
twenty-first century.
This paper outlines proposals for how to implement a partnership model,
divided into the following categories:
• Funding acquisitions and mutual supply guarantees
• Utilizing Israeli capabilities for future technologies
• Integrating Israel and U.S. production, maintenance and warfighting
• Integrating Israel into broader U.S. global agenda
• Regional considerations It proposes numerous avenues to concretize a
partnership model through each of the above categories. Many of these
proposals are relevant to include explicitly in the new MOU, others
could be included in a Letter of Intent (LOI) attached to the MOU, and
others would be best pursued independently of the MOU. It concludes with
a proposal of the text for a new MOU and LOI.
The Prospect of Strategic Partnership The unprecedented cooperation
between Israel and the United States in their March 2026 war with Iran
marked the culmination of a long shift in the nature of the
relationship - from patronage to partnership. Elements of partnership
always existed, but the relationship has now entered a qualitatively
different phase. Never before have the two countries undertaken joint
military action against a mutual enemy. Rather than relying on the U.S.
to do the heavy lifting with the ally playing supporting roles, Israel
operated as a full partner, dividing targets and operational
responsibilities with U.S.
forces.
Israel’s newfound status as strategic partner in the Middle East,
however, stands in stark contrast with the current framework for defense
industrial cooperation. Under what can be called a patronage model, the
U.S. currently provides Israel with $3.3 billion annually in Foreign
Military Financing to purchase American-made equipment, and an
additional $0.5 billion for joint missile-defense projects already under
a partnership model. Yet an emerging consensus in both Washington and
Jerusalem views the aid as anachronistic and seeks changes that will
bring it into alignment with Israel’s role as a full strategic partner.
Prime Minister Netanyahu has stated: “We’ve come of age and we’ve
developed incredible capacities… and our economy will reach about $1
trillion in the coming decade. So, I want to taper off the military aid
in the next ten years.” In Washington today, there is a strong desire to
see partners and allies across the globe move toward funding their own
defense needs and away from subsidies and grants from the U.S. To better
focus on its strategic priorities in the coming decade, the U.S. needs
to direct its resources more carefully and therefore seeks capable
allies that carry their own weight.
In Jerusalem as well, there has been a growing sense over the past two
years of war that it is unhealthy to be so dependent on American
resupply and largesse. The Biden administration’s withholding of
munitions during critical periods of the first year of the war has
driven home for many Israelis the need to re-establish its independence
in this realm. Israel has also noticed that criticism of the aid has
become widespread in both parties. Finally, previous decisions to grant
aid were made, in many cases, to offset security risks that Israel
assumed under the rubric of ‘land for peace’. However, given the
prevailing mindset post October 7th, Israel is not going to be taking on
new security risks by forfeiting territory any time soon.
The transition to a partnership model will offer new opportunities and
avenues to deepen cooperation which is mutually beneficial to each
country’s broader security strategies. To better focus on its interests
in the Western Hemisphere while also winning its great power competition
with China, the U.S. seeks strong, reliable partners in key regions
around the globe. Israel is emerging as the paradigm of such an ally,
who can contribute to U.S. strategic goals in the Middle East, as well
as in security realms relevant to other regions.
The United States and Israel face a converging set of threats from both
state and nonstate actors. Iran and its proxy network represent the
central threat to Israel and a toptier destabilizing force for U.S.
regional interests. U.S. rivals, China and Russia, coordinate closely
with Iran and rely on it as the leader of anti-U.S. actors in the Middle
East. Israel and the U.S. also share operational threats in the form of
cyber, drones, and missiles alongside the convergence of terrorist and
international crime organizations.
In this context, an independent Israel that can decisively defeat its
enemies and fund its own military will be a valuable asset and model
ally. Israel can anchor America’s Middle East strategy, serving as the
bridgehead of the pro-American camp alongside the Gulf States,
countering anti-Western forces, and underwriting the security needed for
a post-Islamic Republic era of prosperity. If the regime survives the
current war, Israel would lead efforts to prevent its resurgence,
freeing U.S. attention and resources for priorities outside the region.
The Benefits and Drawbacks of Aid On the strategic level, a popular
argument put forth in favor of the aid model is that it is a concrete
sign of U.S. support for Israel which strengthens deterrence against its
enemies, as well as a sign of continued U.S. commitment and influence in
the region.
Though there may be some truth to this, the current structure also works
to undermine deterrence, as it projects an image of Israel as a
dependent client, incapable of standing on its own two feet. Deterrence
is ultimately judged in its failure, and clearly the symbolic value of
aid was not enough to deter Iran from facilitating the multi-front
existential war against Israel, launched in October 2023. Rather, the
perception of U.S.
commitment to Israel and to the region stands or falls on its concrete
actions in the face of actual threats. If the U.S. has continued
security interests in the region, then its actions will demonstrate
this; if not, aid to Israel will not convince anyone.
On the economic level, it is frequently argued that the aid model is
mutually beneficial, as it provides Israel with much-needed resources,
for sums that are relatively minor when considering the $7 trillion
dollar U.S. budget. Further, it is said that because the aid is all
spent on purchases from American manufacturers, it serves to create
jobs. It also encourages sales of U.S. weaponry to third parties as
Israel demonstrates the superiority of U.S. weapons platforms on the
battlefield.
There is much truth here too, but it is far from clear that the value of
these benefits is greater than an alternative partnership model. The
$3.3 billion a year of FMF is indeed more economically significant for
Israel than for the U.S. However, what is not fully appreciated is just
how much Israel’s economy has grown since the aid model was instituted
in the 1970s. Since that time, the value of aid has been more or less
consistent around $3 billion a year. Therefore, accounting for
inflation, its real value has diminished over time. In contrast,
Israel’s GDP has grown by a factor of ten in real terms. Together, this
means that the economic significance of the aid for Israel has changed
by orders of magnitude. While in the 1970s, on average the aid
constituted 19% of Israel’s GDP and 23% of its state budget, today it
amounts to only 0.9% of GDP and around 3% of the state budget.
Source: Dataset compiled by the author. Sources include: the World Bank,
the Knesset website, the United States Department of State website, and
others. The aid figures include grants (from 1974 onward) and loans
(until 1984), military aid (for all years), economic aid (until 2007),
as well as dedicated missile defense funding (from 1990 onward). For
2020-24 the numbers include the additional emergency aid given during
the October 7th war. Discounting the additional emergency aid, the
percentage of the budget drops to 2.8%.
Israel does indeed bear tremendous security costs, consistently
investing between 4-6% of GDP - higher than any other democratic state
with a modern economy. Trump has demanded that NATO countries invest 5%
of their GDP in defense, while they remain far from reaching that goal.
The close-to-3% of Israel’s state budget provided by the aid is not a
trivial amount to forgo. Finding alternatives will require budgeting
adjustments and long-term reforms. Nevertheless, with a $610 billion and
growing economy, it is entirely feasible for Israel to undertake a
gradual transition away from aid and toward fully funding its own
acquisitions. Israel has, in fact, already taken into account the
possible drawdown of aid in its new long-term IDF build-up plan,
approved by the Ministry of Finance.
The current framework for defense-industrial-technological cooperation
has also had the side effect of degrading Israel’s indigenous military
industry in general and most acutely its capabilities for independent
munitions production. When there are FMF dollars to spend, it simply
becomes more convenient to buy off the shelf munitions from the U.S.
than to make the long-term commitment of orders that Israeli
manufacturers need to justify maintaining production lines. And so,
munitions production lines were simply allowed to close while Israel
continued purchasing large quantities with FMF dollars from U.S.
manufacturers. This phenomenon is especially acute since the phaseAid as
a % of Israel’s GDP Aid as a % of Israel’s state budget 1974-79 19.0%
23.3% 1980-89 8.3% 11.2% 1990-99 4.1% 7.5% 2000-09 1.8% 4.8% 2010-19
1.2% 3.6% 2020-24 0.9% 3.3% out of “off shore procurement”, that is, the
portion of FMF that could be converted to shekels for purchases from
Israel’s defense industries.
Looking at the U.S. side of the economic balance, it is true that
without the aid, Israel may shop around for some of the capabilities
that it currently purchases with FMF dollars. Israel certainly intends
to manufacture more of its munitions in-house. But Israel is not in a
position to indigenously develop and manufacture its own jet fighter
platforms, on which the bulk of the aid is spent. This means that even
after the aid, Israel will continue to acquire these platforms from the
U.S. in roughly the amount that it does today. The difference is that it
will be Israeli money entering the American economy and creating
American jobs instead of American tax dollars spent by the U.S.
government. Israel will continue to use and enhance U.S. weaponry,
raising its value internationally just as it does today.
Finally, it is said on the political level that the aid framework
facilitates the deep defense-industrial cooperation between the
countries to their mutual benefit. However, as much as it has
facilitated cooperation and connections between the countries, today it
is undermining the very alliance it is meant to uphold. What the
American public appreciates about Israel is its image as a courageous,
initiative-taking nation, that does the impossible and succeeds against
all odds. Israel remains that nation. But it is increasingly difficult
to argue that the start-up nation, at the forefront of global tech,
whose economy has continued to grow even during its longest war, still
requires handouts from the American taxpayer. Israel cannot be both the
start-up nation while at the same time receiving vast sums of aid in a
model similar to third-world economies.
Beyond undermining Israel’s image, at a time of unprecedented
partisanship in America, the need for Congress to regularly pass the
bills necessary to keep the aid flowing gets Israel unnecessarily
tangled up in American domestic politics. During 2024, the aid
appropriations for Israel were held up by the disagreements over aid to
Ukraine and U.S. border security. Furthermore, the very fact that
Congress grants these funds makes Israel into an acute political issue,
as representatives feel they are directly responsible for everything
Israel does with its funds. For many years, Israel was concerned that
bipartisan support was important to keep the aid flowing; today the
existence of aid contributes to the undermining of bipartisan support.
On the other hand, the positive effects of deep cooperation can be
attained by maintained and expanded under a partnership model, of the
type proposed here.
The current model was last codified in the 2016 Memorandum of
Understanding (MOU), which runs through 2028. As the two countries
discuss the parameters of a new MOU, they should approach it as a
process of evolution. This requires carefully delineating between
aspects of the current model that continue to serve the relationship
well and should be maintained, aspects which are no longer in their
mutual interests and should be updated, and new elements that should be
incorporated to realize their full potential as partners.
The transition away from American military aid should not be understood
as a weakening of the U.S.-Israel relationship but as the natural
evolution of a partnership that has matured over decades. Israel’s
growing economic and military strength allows it to assume greater
responsibility for its own defense while contributing more meaningfully
to shared strategic goals. The guiding principle should be Israeli
independence in funding and capability alongside greater integration in
strategy. By replacing a patronage-based aid structure with deeper
technological, industrial, and strategic cooperation, Washington and
Jerusalem can build a relationship better suited to the geopolitical
realities of the twenty-first century.
The following section of this paper outlines proposals for how to
implement a partnership model. It divides these proposals into five
categories:
• Funding acquisitions and mutual supply guarantees
• Utilizing Israeli capabilities for future technologies
• Integrating Israel and U.S. production, maintenance and warfighting
• Integrating Israel into broader U.S. global agenda
• Regional considerations Funding Acquisitions and Mutual Supply
Guarantees 1. Gradually transition from FMF with matching of Israeli
funded purchases The countries could transition away from aid and toward
a partnership model while preserving those elements of the current
framework that are mutually beneficial. The most significant challenge
to this change is that in the coming years, Israel will need substantial
investment to rebuild, rearm, and even expand the IDF after two and a
half years of intense war. Moreover, Israel and U.S. companies have
already contracted for the sale of new fighter jets in the amount of
approximately $20 billion. Therefore, to balance Israel’s desire to move
beyond aid with its urgent need to rebuild the IDF, a new MOU for
2028-2038 should outline a gradual ten-year phase-out of $3.3 billion a
year in FMF grants.
At the same time Israel should commit to matching the overall amount of
aid given during the phase out period with Israeli funded purchases
which would be phased in over the decade.
2. Maintain and expand BMD collaboration Unlike the FMF grant
framework, the additional $0.5 billion a year invested in ballistic
missile defense (BMD) already operates under a collaborative
framework. For the $300 million research, development, testing, and
evaluation (RDT&E) component, U.S.
funds are matched by Israel annually and the intellectual property
rights of this effort are shared. For the $200 million
procurement/co-production component, 50% or more must be spent in the
United States. This cooperation could be maintained and expanded to meet
both countries’ needs.
In the coming years, the countries must focus on expanding production
capacity for interceptors, given how quickly they can be used up in a
high-intensity war. This means accelerating co-production of
interceptors for operational systems as well as pushing forward High
Energy Laser systems, which are vastly cheaper.
US FMF grants Israeli funds $US $US 2028 3,300,000 2029 2,970,000
330,000 2030 2,640,000 660,000 2031 2,310,000 990,000 2032 1,980,000
1,320,000 2033 1,650,000 1,650,000 2034 1,320,000 1,980,000 2035 990,000
2,310,000 2036 660,000 2,640,000 2037 330,000 2,970,000 2038 0 3,300,000
Total FMF for 2029-2037 14,850,000 Total Israeli funds for 2029-2037
14,850,000 3. Two-way fast-track procurement for defense articles The
current model provides for fast-track mechanisms to reduce bureaucratic
delays and ensure Israel’s access to U.S. defense technologies. This
should be maintained even once Israel is financing its purchases
independently. It should be expanded to include an Israeli guarantee to
prioritize U.S. access for articles it sells to the U.S. Military.
Israeli systems purchased by the U.S. include: Trophy Active Protection
System for protecting tanks against anti-tank-guided-missiles and rocket
propelled grenades and the Iron Fist Light Configuration active
protection system for armored personnel carriers, both used by the U.S.
Army; The Common Laser Range Finder used by the U.S. Marine Corps to
concealed positions with imaging, range-finding, and navigation through
combat areas; Joint Helmet Mounted Cueing System; LITENING Targeting
Pod; UAV (Unmanned Aerial Vehicles); Python-4 Air-to-Air Missile and
more.
4. Mutual guarantee not to block delivery for political reasons.
Unfortunately, we have seen attempts to block delivery of equipment for
purely political reasons and this could repeat itself even for equipment
purchased independently without FMF. The countries should explore
possibilities to protect against this including legislation in the
Senate. The commitment should be mutual, in which Israel guarantees to
the same for any equipment it supplies to the US.
Utilizing Israeli Capabilities for Future Technologies 5. Establish
investment funds for U.S. investment in Israeli defense tech Israel is a
leading innovator in high-tech, particularly defense technologies. To
keep both countries at the forefront of the tech arms race, they could
establish investment funds allowing the U.S. government or private
investors to fund R&D for Israeli companies with a clear financial
return. Returns could also be strategic, such as guaranteeing U.S.
purchases at cost price or other mutually beneficial arrangements.
These funds could cover cyber, AI, quantum technology, drones and
counter-drone systems, remotely piloted fighter aircraft,
directed-energy (laser) systems, and space and satellite technology.
This could be similar to the BIRD framework that currently exists for
non-defense technologies.
6. Integrate Israel into Golden Dome project One new potential avenue
of expanded cooperation is the Golden Dome project. Israeli
ingenuity and practical experience in conducting mass interceptions
against ballistic missiles, drones, and cruise missiles, could be of
vital importance for the administration’s new project. Israel’s role
could be as technology supplier, especially for interceptor concepts
and lasers; as a subcontractor or partner to U.S. primary
contractors; and in an advisory role, with Israeli combat and
engineering experience feeding into U.S. design decisions.
Specifically, Israeli industries could contribute in the radar and
threat detection realm, and as well in interception. The Arrow 3
system has proven itself highly combat effective against both
long-range ballistic missiles and could be adapted for other
contexts.
The land-based capabilities of the currently fielded Arrow-3 could be
employed roughly as-is and could also be adapted to hit threats orbiting
Earth in space, or intercept during the boost phase. Israel has another
advantage as it could potentially provide systems for the dome in a mere
two to three years. Israel could also contribute in laser interception.
7. Israel’s role in next-generation fighter F47 Israel could also play
a key role in developing the next-generation F-47 and its advanced
subsystems. For example: broadband satellite communications,
multi-layered encryption systems integrating hardware and software,
electronic warfare and soft and active defense systems, adaptive
multi-purpose munitions, AR displays (helmets and cockpits with
augmented reality), and synthetic aperture radars (SAR). In nearly
all of these fields, Israel is at the forefront of technology
globally.
Integrating Israel and U.S. Production, Maintenance and Warfighting:
8. Make Israel regional hub for depot-level maintenance for platforms
including the F35 Israel has unique technical capabilities for the
high-level maintenance required to sustain a combat-ready fleet.
Designating it as a depot for the U.S. military itself and other
U.S. partners would strengthen the U.S. alliance network in the
region and provide an efficient, local alternative for maintaining
these platforms. The U.S. military currently flies its planes
stationed in the Middle East vast distances at great cost to perform
maintenance. Doing even part of this in Israel would save
significant costs.
Israel could also provide these services to U.S. partners in the Middle
East region, potentially even Saudi Arabia if it normalizes relations.
Greece, who is expected to receive the F35 in 2028, or other European
operators could also do their depot-level maintenance in Israel. The
U.S. could also consider transferring the manufacturing of F35
components from other locations to Israel.
9. Israel’s munitions production capacity as a component in U.S. and
allies supply chain Israel is already in the process of rebuilding
its manufacturing lines for a variety of munitions. This is
necessary both to ensure its independence in warfighting and given
that the U.S. is experiencing a lack in its supply and production
capacity, especially in the event of a direct conflict. The
challenge in Israel is how to maintain the economic feasibility of
these manufacturing lines over time, once stockpiles have been
established. Israel and the U.S. could come to an agreement for
Israel to be a supplier to the U.S. military, as well as for U.S.
allies who are also in need of munitions. Part of this would entail
cooperation to secure the critical raw materials necessary for
munitions. Conditions could include that Israel grant supplying the
U.S. priority during a U.S. war; Israeli priority during an Israeli
war, and sell to U.S. and allies during peacetime.
10. Flight-data sharing and enhancements to American platforms Israel is
the leading combat user of the F35 and has much experience with
additional platforms such as the F15. Israel currently shares with
the U.S. invaluable flight data from its combat experience that
helps the latter use its jets more efficiently and to develop newer
versions and upgrades to the platforms. This information sharing
should be formalized in the MOU and also accounted for in future
contracts for Israeli purchases of American platforms. Likewise,
Israeli enhancements to the F35 are already being shared with
manufacturers to great benefit. Israel’s extended range
modifications reduce exposure of re-fueling tankers to attack and
have direct benefit to U.S. potential warfighting theatres. Also,
electronic warfare modifications help Israel against air-defense
systems in Iran. Israel’s sharing of modifications should also be
formalized.
11. Establish dialogue on new warfighting doctrines in the era of drones
and missiles Over the course of Israel’s Iron Swords War and
particularly in the front with Iran, Israel has moved one step ahead
in future warfighting. Israel implemented a doctrine of decapitation
to paralyze enemy command and control structures that could be
highly relevant to possible U.S. conflicts in other regions. In
addition, Israel has lessons in mass drone warfare, both offensive
and defensive, as well in maintaining the F35 and operating it with
unprecedented efficiency. Senior US officials have said that lessons
learned by these high-tempo Israeli F-35 operations will be
especially important in preparing for a fight in the Pacific.
There are also tactical ground fighting lessons to be discussed on urban
warfare, counter-tunnel methods. A formal forum for dialogue on Israel’s
doctrinal lessons from the past two years could be established. As well,
the joint warfighting during Operation Epic Fury/Roaring Lion
demonstrated the vast potential for cooperation and mutual enhancement.
A formal forum could be established to share these doctrinal lessons
with the U.S. and its allies.
12. US basing in Israel Israel should consider offering the U.S. a
long-term military footprint in its borders.
The Roaring Lion/Epic Fury operation have clarified the advantages of
such an arrangement for both sides. Major considerations should be to
utilize a location that is operationally valuable, but will minimize any
potential constraints on Israel’s future freedom of action. Israel can
offer to host the American forces, but funding for any construction
necessary should be primarily American.
13. US-run nuclear power plants in Israel Israel currently faces
obstacles that prevent its utilization of nuclear energy as it is
not a signatory to the NPT. However, coming to a unique agreement
with the U.S. for American nuclear power plants in Israel could be a
mutually beneficial solution that will help Israel meet its energy
needs for growing AI data centers.
14. Release or lend-lease of platforms/technologies Historically, the
U.S. has not been interested in selling certain platforms that
Israel may lack. The countries can consider a lend-lease agreement
that would allow Israeli usage with fully exporting these platforms.
A strategic bomber is currently a leading platform of this sort
alongside bunker buster bombs.
Integrating Israel into Broader U.S. Global Agenda 15. Expand
intelligence sharing dialogue on external actors in Middle East The U.S.
and Israel already share intelligence closely, and existing arrangements
should be maintained and acknowledged as part of Israel’s contribution
to U.S. security.
Cooperation could be expanded to have Israel provide intelligence
specifically on the presence and activities of external actors who are
hostile to the U.S., across the Middle East. Utilizing and growing
Israeli intelligence capabilities in this way could be of great mutual
value to American interests globally.
16. Israeli release technologies to U.S. allies/partners in East-Asia:
export Arrow to India In order to strengthen U.S. allies’ and
partners’ abilities to face their own security challenges, the U.S.
and Israel should identify which of their needs could be met by the
export of Israeli defense technologies and systems. Israeli
knowledge, experience, and technologies could support U.S. allies in
East Asia, including the Philippines, Vietnam, Taiwan, Japan, and
South Korea (and potentially Indonesia if it decides to establish
relations with Israel). This could include training programs and
facilitating exports of Israeli capabilities and technologies to
strengthen these partners.
Israel already exports various systems to many of these countries, and
what works on a bilateral basis can remain so. However, there are some
systems that require U.S.
approval. Specifically, India has expressed interest in the Arrow
missile defense system.
This would make strategic sense to bolster India’s defense and integrate
it into the broader U.S. alliance, as well as assist Israel in growing
its economy after aid.
Israeli dialogues on warfighting and lessons learned could also be
established with U.S.
allies/partners in East-Asia as part of this assistance to the U.S.
broader agenda.
17. Integrating cyber research and operations Israeli capabilities in
cyber have great demand amongst mutual allies and partners of the
US. However, in the past few years Israel significantly limited the
countries it would sell these capabilities to, including at the
request of the U.S. Now is the time for renewed consideration of
expanding this list, in a cautious and coordinated way to assist
worthy partners, who already meet criteria for the sale of sensitive
weapons. The two countries should also explore possibilities for
Israeli companies to provide cyberrelated services to American
government users and for joint research and development projects.
Doing so could limit proliferation of cyber capabilities to
undesirable actors while keeping both countries at the forefront of
technology.
18. Support further expansion of Israeli gas exports to Europe Israel
already exports natural gas from its fields in the Eastern
Mediterranean but more can be done to facilitate exploration and
grow infrastructure that would allow greater exports to Europe and
to position Israel as a regional hub for gas pipelines. There is
likely more gas to be found and the U.S. could facilitate and
encourage American companies to engage in further exploration and
development. Among these steps could be considering investing in a
Liquefied Natural Gas (LNG) plant in Israel or possibly in Cyprus to
facilitate Israeli exports to Europe as an alternative supplier.
Regional Considerations 19. Regional integration of BMD architecture BMD
collaboration has been operationalized during Epic Fury/Roaring Lion.
This could be the basis for a more integrated missile defense among U.S.
allies in the Middle East.
20. Renew commitment to QME: conditions on sale of F35 to regional users
Mechanisms to uphold Israel’s qualitative military edge should be
maintained. Israel supports security cooperation with states that
normalize relations with it but must guard against potential
upheavals that frequently occur in the Middle East. This can be done
by limiting the capabilities of the additional F35 users while also
releasing new technologies to Israel.
Any sale of F35 should be conditioned on normalization with Israel as
well as guarantees that the technology would not be shared with China.
Beyond the stealth capabilities, the F-35’s advanced detection,
data-processing and networked systems are one of the pillars of Israel’s
air superiority in the region. Harm to Israel’s QME could be limited by
placing limitations on numbers of aircraft, timeline for delivery and
capabilities on any platforms sold to other countries in the region.
Reporting has mentioned seven years until first delivery, and limitation
to two squadrons only.
Limitations on capabilities could include at a minimum to exclude any of
the Israelideveloped upgrades which include classified avionics, locally
integrated mission systems and operational software Israel is uniquely
authorized to tailor. Beyond that, it would mean limiting the software
that manages electronic-warfare and targetrecognition.
Also, the type of weapons, meaning not selling the AIM-260 missile,
under development, which represents the most sensitive missile
technology associated with the F35 platform with a 120 mile-plus range
while releasing the missile to Israel.
Finally, the U.S. must have control of software updates, data systems
and maintenance diagnostics, spare parts, and depot-level support.
21. Review aid model to Egypt and Jordan to fully align with U.S.
interests The emergence of FMF grants to Egypt and Jordan were,
historically, tied to the establishment of aid to Israel. Therefore,
as Israel moves to transition away from FMF, this should open a
discussion on the continued logic of FMF aid to Egypt and Jordan as
well. It is in Israel’s and the U.S. interest to maintain these
regimes’ stability but they must also be expected to behave as
allies. If Egypt and Jordan desire to maintain this model they
should be required to more fully align with U.S. interests and make
an independent case as to why this is beneficial. Part of this
alignment should be that Egypt and Jordan must fully comply with the
terms of their peace agreements with Israel, specifically regarding
the growing Egyptian military presence in the Sinai Peninsula.
Given the aid they currently receive, and the assistance they receive
from Israel on civilian infrastructure (water, gas), both Egypt and
Jordan should commit to cease their hostile diplomatic activity toward
Israel in international forums.
22. Public rollout of new MOU should emphasize Israel’s growing strength
and its desire to be a more independent U.S. ally The public rollout
of a new MOU transitioning away from FMF grants should emphasize
that it is the product of Israel’s growing strength and its desire
to be a more independent U.S. ally. It should make clear that the
change will not weaken strategic ties but rather strengthen the
relationship. The mutual nature of the new agreement including
Israeli commitments to buy American in the same amount of the
phase-out FMF should be emphasized. This can be done with a joint
press conference with both heads of state and possibly a speech by
the Israeli PM to U.S. congress to clarify these messages.
23. Facilitate implementation of the India-Middle East–Europe Economic
Corridor (IMEC) The IMEC provides a strategic economic counterweight
to China’s Belt and Road Initiative while strengthening alignment
among U.S. partners in the Middle East and Indo-Pacific. Integrating
ports, rail, energy pipelines, and digital infrastructure, IMEC
would deepen economic ties among pro-American states forged since
the Abraham Accords and position Israel as a central logistical and
commercial hub linking Asia, the Gulf, and Europe. In light of the
recent vulnerability of the Straits of Hormuz, investing in
alternative pathways for exporting energy from the Gulf have become
more urgent.
Appendix 1: Proposed draft for new MOU1 *** MEMORANDUM OF UNDERSTANDING
(MOU) The United States and Israel affirm their mutual desire to deepen
their relationship in a way that strengthens their technological,
industrial, military and strategic cooperation.
This MOU, alongside the attached Letter of Intent (LOI), outlines the
pathway to transition away from Israeli reliance on U.S. financial
assistance and toward a model of strategic partnership which will
strengthen the national security of both countries.
I. Phase Out of FMF Grants and Israeli Matching Reflecting the mutual
desire to transition in a way that strengthens their security interests
and avoids dislocations in long-term planning, the countries resolve to
phase out all Foreign Military Financing grant assistance down to zero
over the course of the ten-year period beginning in Fiscal Year (FY)
2029 and ending in FY 2038. The drawdown will proceed linearly such that
in 2038 FMF grants with be zero. All of these FMF resources will be made
available exclusively to finance the purchase of U.S.
military goods and services in the United States.
In parallel, Israel will phase in its own funds with which it will
commit to purchasing U.S. military goods and services such that over the
course of the ten-year long MOU Israeli funds will match the total
amount of FMF funds for this period, according to the following
schedule:
1 The language from the previous MOU has been retained wherever
applicable.
US FMF grants Israeli funds $US $US 2028 3,300,000 2029 2,970,000
330,000 2030 2,640,000 660,000 2031 2,310,000 990,000 2032 1,980,000
1,320,000 2033 1,650,000 1,650,000 2034 1,320,000 1,980,000 2035 990,000
2,310,000 2036 660,000 2,640,000 2037 330,000 2,970,000 2038 0 3,300,000
Total FMF for 2029-2037 14,850,000 Total Israeli funds for 2029-2037
14,850,000 II. Missile and Rocket Defense Cooperative Programs In
contrast to FMF grants, the decades-long cooperation on missile, rocket,
and projectile defense is already structured as a partnership that
contributes directly to both countries’ national security. Therefore,
the United States supports mutual funding for cooperative programs to
develop, produce, and procure missile, rocket, and projectile defense
capabilities to help Israel meet its security needs and to help develop
and enhance U.S. missile defense capabilities. Such funding should, over
a ten-year period beginning in FY 2029 and ending in FY 2038, be
provided at the level of $500 million per year. Total funding over the
course of this understanding would equal $5 billion.
This level of funding is not associated with any particular quantity of
the Iron Dome, David’s Sling, Arrow 3 weapon systems, components or
interceptors. Also consistent with past practice, the United States and
Israel are to enter into separate bilateral agreements for such
cooperative programs.
The United States and Israel jointly understand that missile defense
funds are to be used primarily for the purposes of developing and
procuring articles and services necessary to missile, rocket, and
projectile defense systems for the defense of Israel. Both sides jointly
understand that any U.S. funds provided for these purposes should be
made available on the basis of best efforts at matching financial and
non-financial contributions by Israel for such systems, as negotiated in
the memoranda of agreement.
The United States and Israel note the importance of maximizing
co-production of parts and components of such defense systems in the
United States, at a level equal to or greater than 50 percent of
U.S.-appropriated funds for production, or as negotiated in the
production memoranda of agreement.
Based upon their comprehensive discussions, both sides jointly commit to
respect the missile defense funding levels specified in this MOU, and
Israel commits not to seek additional missile defense funding from the
United States for the duration of this understanding, except in
exceptional circumstances as may be jointly agreed by the U.S.
administration and Israel, such as in the event of a major armed
conflict involving Israel.
III. Purposes of U.S. Security Assistance, Promotion of Effective
Cooperation, Transparency, and Accountability Both governments are
committed to the most efficient expenditure of security funds.
Both sides understand that the ultimate intent of FMF assistance is to
help enable Israel to defend itself by itself and develop long-term
capacity, through the acquisition of advanced capabilities that are
available from the United States. Accordingly, with the commencement of
this MOU, both sides understand that FMF is not intended for the
purchase of fuel or other consumables.
The United States and Israel intend to continue their active dialogue on
security and security policy in existing bilateral committees. The two
sides expect, through ongoing bilateral consultations, to maximize
understanding and transparency regarding how U.S. funding is used for
defense purposes in Israel, as well as how U.S. financial contributions
to Israel’s security relate to Israel’s investment in its own security
via the expenditure of its national funds. To that end, Israel is to
provide:
a. Detailed programmatic information related to the use of all U.S.
funding.
b. Program/acquisition plans for each weapons system procured using
funds provided by the United States.
c. An annual update on all cooperative defense programs, to include
progress reports and spend plans, as well as the top-line figure of
the Israel Missile Defense Organization (IMDO) budget.
Both sides acknowledge that the funding levels in this understanding
assume continuation of adequate funding levels for U.S. foreign
assistance and missile defense overall, and are subject to the
appropriation and availability of funds for these purposes.
IV. Mutual Commitment to Expedited Procurement and Delivery Of Defense
Articles With the understanding that sales of military equipment
between the United States and Israel serve both countries’ core
national security interests, they commit to establishing and/or
maintaining fast-track mechanisms to reduce bureaucratic delays
whether purchased with FMF or Foreign Military Sales resources. This
applies also to military equipment purchased by the United States
from Israel. Both countries affirm that any unnecessary delays
undermine long-term national security interests.
V. Flight-Data Sharing and Enhancements to American Platforms As a
leading combat user of the F35 and an experienced user of additional
U.S.-made platforms, Israel commits to sharing with the U.S. flight data
from its combat experience, which assists the U.S. with raising
efficiency and in further development for newer versions and upgrades to
the platforms.
VI. Dialogue on new warfighting doctrines A twice-yearly dialogue on
warfighting doctrine will be established in which the two countries’
militaries will share their insights and best practices on
developing warfighting techniques and doctrines.
VII. Expand intelligence sharing dialogue outside hostile powers in
Middle East The U.S. and Israel resolve to expand their
intelligence-sharing by establishing a new dialogue on the
presence, activities and capabilities of external hostile powers in
the Middle East. This dialogue will allow for the utilization of
Israel’s capabilities as a regional intelligence leader to provide
information and insights on topics of broader interest to the U.S.
VIII. Maintaining Israel’s Qualitative Military Edge The U.S. re-affirms
its commitment to maintaining Israel’s qualitative military edge
and to continuing its close dialogue and on any new sales of
military equipment to the region that may impact on it.
SIGNED at Washington, this -th day of _______, 2026, in duplicate, in
the English language.
Letter of Intent on Further Avenues of Cooperation UTILIZING ISRAELI
CAPABILITIES FOR FUTURE TECHNOLOGIES 24. Funds for U.S. investment in
Israeli Defense Technologies The U.S. and Israel resolve to establish
investment funds that would facilitate and encourage U.S. government or
private investors to fund R&D for Israeli companies with a clear
financial return. These funds could cover cyber, AI, quantum technology,
drones and counter-drone systems, remotely piloted fighter aircraft,
directed-energy (laser) systems, and space and satellite technology.
25. Integration of Israeli Innovation into Golden Dome Project The U.S.
resolves to integrate Israeli ingenuity and practical experience in
missile defense into its new Golden Dome Project. Israel is a leader
in development and combat use of missile defense systems and this
knowledge could make a critical contribution to the success of the
project and for the defense of the U.S. homeland.
26. Israel’s Role in Next-Generation Fighter F47 The U.S. resolves to
integrate Israeli knowledge and experience in the development stage
of the next-generation F-47 and its subsystems.
INTEGRATING ISRAEL AND U.S. PRODUCTION, MAINTENANCE AND WARFIGHTING:
27. Israel as regional maintenance hub for depot-level for platforms
including the F35 Recognizing that Israel has unique technical
capabilities for the high-level maintenance required to sustain
combat-ready jet-fighter fleets, the U.S. resolves to designate it
as a depot qualified to work on U.S.-owned platforms and those of
U.S. partners. This with the aim of strengthening the U.S. alliance
network in the region and provide an efficient, local alternative
for maintaining these platforms.
28. Israel’s Munitions Production Capacity as a Component in U.S. Supply
Chain The U.S. and Israel will negotiate a memorandum of agreement
on cooperation in munitions production. Given the current need to
expand the industrial base for munitions manufacturing for both the
U.S. military and U.S. partners, Israeli production capacity could
play a role as part of U.S. infrastructure. The negotiating
agreement will discuss levels of purchasing of Israeli-made
munitions by the U.S. and commitments to give priority supply to the
U.S. in the event of an active front in which the U.S. is fighting
while Israel is not. This agreement should include cooperation to
secure the critical raw materials necessary for munitions
production.
29. Expanded U.S. Military Footprint in Israel Israel resolves to
provide an appropriate space for an expanded U.S. military footprint
on its soil. The Roaring Lion/Epic Fury operation have clarified the
advantages of such an arrangement for both sides. Major
considerations should be to utilize a location that is operationally
valuable, and defensible, but will minimize any potential
constraints on Israel’s future freedom of action. Israel will
provide the space and U.S. will provide funding for necessary
construction to be executed by local contractors.
30. Sale or Lend-Lease Agreement for Platforms and Technologies The
countries resolve to positively explore any critical military
capabilities that Israel currently lacks that the U.S. could help
fill by releasing new platforms. For example, a B-1 strategic bomber
could be lend-leased to Israel and/or bunker buster bombs.
31. Israeli Release of Co-owned Technologies to U.S. allies/partners in
EastAsia In order to strengthen U.S. allies’ and partners’ abilities
to face their own security challenges, the U.S. and Israel will
explore which of their needs could be met by the export of systems
which have been co-developed by Israel and the U.S., primarily in
the realm of missile defense. Specifically, they should explore the
release of the Arrow System to appropriate countries.
SIGNED at Washington, this -th day of _______, 2026, in duplicate, in
the English language.