Multiple diplomatic sources have revealed that the United Arab Emirates and Israel have established a joint defence acquisition fund aimed at developing weapons systems and expanding military cooperation across the region, in a move reflecting the growing security partnership between both sides amid escalating regional tensions.
According to a current and a former American official familiar with the matter, the UAE and Israel have created a joint fund dedicated to acquiring and developing advanced weapons systems, marking the latest indication that the war on Iran is pushing both countries towards deeper military and intelligence coordination.
A current American official told the British outlet Middle East Eye that both sides are pursuing the “joint acquisition” of weapons systems under a new defence partnership framework. The official added that the UAE may also finance technological upgrades to Israeli air defence systems.
Another official confirmed that the agreement was reached during Israeli Prime Minister Benjamin Netanyahu’s visit to the UAE during the joint American and Israeli war on Iran. Netanyahu’s office released an official statement regarding the visit, prompting Abu Dhabi to issue a rare public denial.
The American official added that both the UAE and Israel are seeking to jointly acquire and develop anti drone systems alongside broader air defence technologies.
A former American official stated that “significant funding” had already been allocated to the project, noting that the cooperation would extend beyond air defence systems alone.
Expanding Security Partnership
Yoel Guzansky, a senior fellow at the Institute for National Security Studies in Tel Aviv specialising in Gulf affairs, described relations between the UAE and Israel as “the strongest they have ever been”, adding: “This is the closest cooperation Israel has ever had with an Arab state.”
The growing alignment follows large scale Iranian attacks targeting Gulf states in response to the American and Israeli assault in February. According to the report, the UAE was targeted by approximately 3,000 Iranian drones and missiles.
In May, American Ambassador to Israel Mike Huckabee confirmed that Israel deployed Iron Dome batteries and operational personnel inside the UAE during the war.
Guzansky described the creation of a joint weapons development fund as “the logical next step” in relations between the two countries, stating: “Israel needs Emirati money. We have the technology but lack the resources, while the UAE has the resources but lacks the technology.”
Rising Gulf Military Spending
The report noted that expanding defence cooperation between Israel and Gulf states is likely to trigger widespread controversy, particularly as military coordination across the region deepens.
Government estimates place Emirati defence spending for 2026 at approximately US$27 billion, equivalent to around 5 per cent of the country’s gross domestic product.
Diplomats and defence sector sources confirmed that Gulf states are moving towards significantly increasing military spending following the recent Iranian attacks.
Abu Dhabi alone controls nearly US$2 trillion through its sovereign wealth funds, in addition to holding the majority of the UAE’s oil reserves.
Bernard Haykel, professor of Near Eastern Studies at Princeton University, stated that Israel may increasingly view the UAE as an alternative financial backer amid declining American support.
“American funding is becoming politically vulnerable, so why wouldn’t Israel turn towards the UAE?” Haykel said.
Abraham Accords Drive Defence Integration
In May, Bloomberg revealed that Abu Dhabi Crown Prince Khaled bin Mohamed Al Nahyan discussed plans with Emirati officials to establish an investment entity focused on the defence sector.
The report noted that strengthening military and defence relations between the UAE and Israel has been one of the central objectives promoted by supporters of the Abraham Accords since normalisation was signed in 2020.
In June 2025, the Emirati defence company EDGE Group acquired a 30 per cent stake in the Israeli firm Third Eye Systems, which specialises in integrating artificial intelligence technologies into drone systems.
Haykel described the latest deal as “a logical extension” of previous defence agreements between the two sides.
Israel’s Search for Alternative Funding
The report highlighted that Israel has benefited for decades from extensive American military support, receiving approximately US$3 billion annually in military aid, in addition to US$21 billion spent on Israeli defence systems up to September 2025, according to Brown University’s Costs of War project.
Israeli Prime Minister Benjamin Netanyahu previously acknowledged that Israel may eventually need to reduce its reliance on American assistance amid declining public support for Israel inside the United States, particularly among younger Americans.
Gulf Divisions Over the War on Iran
The report also noted that the UAE, Saudi Arabia and Qatar all opposed the American war on Iran before it began, but adopted different positions once the conflict escalated.
While Saudi Arabia supported Pakistani mediation efforts to end the war, reports indicated that the UAE attempted to obstruct negotiations and privately and publicly pressured the United States to continue targeting Iran.
Firas Maksad, managing director for the Middle East and North Africa at Eurasia Group, stated that Gulf states fear bearing the consequences of any future American agreement with Iran.
He added that the UAE increasingly relies on its relationship with Israel as a pressure mechanism against Tehran.
“The more hostile relations with Iran become, the closer the UAE moves towards Israel and the more their military and security partnership expands,” he said.
