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U.S., Israel Negotiate New Aid Package

by defense news Tuesday, May. 15, 2007 at 4:06 PM

"Danny Ayalon, who served as Israel’s ambassador to the United States until November, said Israel was hoping to seal a new 10-year deal before the end of President George W. Bush’s mandate in January, 2009."


"Senior U.S. and Israeli officials are discussing a new military aid package that could raise annual U.S. support from .4 billion to nearly billion over the next decade.

According to political and security sources here, Tel Aviv is seeking a 0 million to 0 million hike in U.S. Foreign Military Financing (FMF) for development and procurement of systems needed to defend against the growing terror threat and the specter of an Iranian nuclear attack.

Israeli Defense Minister Amir Peretz and Ephraim Sneh, deputy defense minister, plan to discuss Tel Aviv’s enhanced aid request in meetings this week in Washington with U.S. Defense Secretary Robert Gates and other senior U.S. officials. It is Peretz’s first visit to the Pentagon since the former labor union leader became Israel’s top civilian defense official earlier last year.

This week’s planned meetings follow an intensive round of discussions that began March 1 in Washington by senior foreign policy, economic and security officials of the two governments. The negotiations were announced jointly in Washington by the U.S. State Department and Israel's Embassy.

“The meeting today is another manifestation of the unshakable commitment by the United States to Israel's security and a step towards fortifying and enhancing the strategic relationship between our two countries,” the March 1 statement said.

According to sources here, Israeli government representatives presented their U.S. counterparts with a well-coordinated appeal for the aid increase, backed by economic and budgetary data and updated threat assessments by Israel’s various intelligence agencies.

Amos Gilad, the Ministry of Defense’s (MoD’s) director for strategic planning and a retired major general, led bilateral discussions on behalf of Israel’s defense establishment. In parallel, Bank of Israel Governor Stanley Fischer and directors-general of the Israeli Finance Ministry and Foreign Ministry presented the government’s monetary and foreign policy case for the aid hike.

“We’re optimistic that our American friends in the executive branch and in Congress will agree to a significant elevation in current military aid levels,” an MoD official said March 1. “Washington shares our concerns regarding future threats, and understands that more money will be required to preserve Israel’s qualitative military edge.”

The requested multiyear aid package seeks to raise Washington’s annual military support to Israel by some million to million over the next decade. It will replace a bilateral 10-year plan that expires in the coming fiscal year, officials from both countries said.

Under the 1998 agreement, Washington incrementally raised its annual military grant aid to Israel by million each year while, in parallel, reduced annual economic loans by 0 million. Prior to that agreement, Israel had received .8 billion in FMF and .2 billion in so-called Economic Support Funds (ESF).

By 2008 — the last year of the 10-year agreement — Israel will have weaned itself completely of ESF, while its FMF reaches peak levels of .4 billion.

In addition to FMF aid, the bulk of which goes to U.S. firms that provide front-line platforms for the Israeli military, Israel routinely receives separate line-item funding for specific joint development and upgrade programs. Since 1988, for example, Washington has provided nearly .3 billion to fund the Arrow weapon system and related missile defense programs.

Moreover, for more than a decade, Israel has received additional funds from the U.S. government’s Technical Support Working Group, a separate interagency funding pot that encourages development of anti-terror systems.

The United States also provided billion in special military aid and billion in loan guarantees in 2003.

An amendment to the 2005 National Defense Authorization Act earmarks at least million each year “for the establishment of cooperative programs with the government of the United Kingdom and the government of Israel for the development of advanced technologies and prototype equipment for combating terrorism.”

Israeli officials here said they hoped to secure U.S. approval for the requested aid hike by late summer or early autumn. Until the two governments agree to specific terms, conditions and funding levels for the aid package, defense officials here said they will be unable to finalize their own multiyear spending plans.

New big-ticket modernization programs whose approval is contingent on increased U.S. aid include Israel Navy warships based on the U.S. Navy’s Littoral Combat Ship, up to 100 F-35 Joint Strike Fighters, primary aircraft trainers, troop transports and the Patriot Advanced Capability-3 missile defense system, sources here said."

Agence France-Presse contributed to this report from Washington.

U.S., Israel Begin Talks on New 10-Year Aid Plan


"U.S. and Israeli officials opened talks March 1 on a new multi-year plan for U.S. aid to the Jewish state, which could seek additional funds to meet evolving threats from Iran, Syria and Islamic militants.

The negotiations, announced jointly by the U.S. State Department and Israel’s embassy, aim to replace a 10-year U.S. aid program that runs out in 2008 and saw Israel maintain its position as the biggest recipient of U.S. assistance.

Under that plan, military aid to Israel rose from .8 billion to .4 billion per year, while civilian aid, which totaled .2 billion in 1998, was phased out.

The U.S. also provided a billion dollars in special military aid and nine billion dollars in loan guarantees in 2003.

The current talks will define “our next 10-year assistance relationship and Israel’s long-term economic and military security requirements,” the joint statement said.

The negotiations are led by Under Secretary of State Nicholas Burns for the United States and an Israeli team headed Bank of Israel Governor Stanley Fischer and finance ministry official Yarom Ariav.

”The meeting today is another manifestation of the unshakable commitment by the United States to Israel’s security and a step towards fortifying and enhancing the strategic relationship between our two countries,” the statement said.

Israel was expected to seek a renewal of the multi-year assistance plan tailored to meet the new security threats and economic realities facing their country.

”There is a continuing discussion about the emerging threats and also the economic expectations over the next 10 years — what Israel’s economic capabilities are in dealing with emerging threats,” one official said on condition of anonymity.

Danny Ayalon, who served as Israel’s ambassador to the United States until November, said Israel was hoping to seal a new 10-year deal before the end of President George W. Bush’s mandate in January, 2009.

”The political clock is right,” Ayalon told the Jerusalem Post newspaper, suggesting Israel should seek more than the current .4 billion in annual aid to meet new threats posed by Iran’s long-range ballistic missiles or its uranium enrichment program, which both the U.S. and Israel fear is a cover for developing nuclear weapons.

Israel is also concerned over Syria’s ballistic missile arsenal and shorter-range rocket threats from Lebanon’s Hezbollah militia and from Palestinian militants in the Gaza Strip."

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