Who Pays for Israel’s Weapons?

Since the end of World War II, United States assistance to Israel has exceeded 300 billion dollars, combining both military and economic support. This makes Israel the largest cumulative recipient of American foreign aid in modern history, despite the absence of a formal mutual defence treaty comparable to those binding Washington with NATO allies or Japan.

A report by Al Jazeera traces the origins of this exceptional relationship back to the 1960s. In 1962, John F. Kennedy approved the sale of defensive missile systems to Israel, breaking an informal embargo that had restricted the transfer of major offensive weapons.

The primary driver behind this decision was Washington’s intent to counterbalance Soviet arms supplies to Egypt at the time. During this early phase, support largely took the form of loans with interest rather than outright grants, a structure that would later undergo a fundamental transformation.

The 1973 Turning Point

The October 1973 war marked a decisive shift in the nature of US support. Following early battlefield setbacks, Israeli Prime Minister Golda Meir requested urgent assistance. The US Congress, under the leadership of Richard Nixon, approved an emergency package worth 2.2 billion dollars, alongside thousands of tonnes of military equipment.

In an unprecedented move, 1.5 billion dollars of this package was subsequently converted into a direct grant, with additional waivers applied to significant portions of the remaining loan interest. This marked the beginning of a long-term shift towards non-repayable military aid.

Taxpayer-Funded Military Support

By the 1980s, amid a severe economic crisis in Israel where inflation reached 400 percent, the transformation became complete. The administration of Ronald Reagan converted military assistance from loans into fully non-repayable grants.

The legal framework underpinning this support had already been established in 1976 through the Foreign Military Financing programme, funded by US taxpayers. The programme requires that allocated funds be spent exclusively on American military equipment and services.

However, Israel was granted exceptional privileges not extended to any other recipient. Notably, it was allowed to spend approximately 26.3 percent of its aid domestically to develop its own military industry. It also gained the ability to secure large-scale procurement deals, including advanced platforms such as the F-35, based on guaranteed future aid backed by the US government.

Long-Term Funding Agreements

In the 1990s, the relationship evolved into structured long-term commitments through ten-year memoranda of understanding. These agreements began in 1999 under Bill Clinton, totalling 21.3 billion dollars.

Subsequent agreements expanded significantly, including a 30 billion dollar package under Barack Obama. The current agreement has reached 38 billion dollars, equating to 3.8 billion dollars annually, and is set to run until 2028.

War Funding and Escalation

Following the outbreak of the Gaza war in 2023, the US Congress approved an additional 14.1 billion dollars in supplemental funding. This brought total US financial support to Israel during the first two years of the war to approximately 21.7 billion dollars.

At the same time, Israeli Prime Minister Benjamin Netanyahu, who is wanted by the International Criminal Court, is reportedly seeking to extend the current agreement from ten years to twenty.

A Shifting Debate

These developments have triggered growing debate over whether the era of unconditional US support for Israel is beginning to shift. While the financial and military ties remain deeply entrenched, increasing scrutiny is being directed at the long-term sustainability and political implications of this level of support.