The United States and Israel signed a defense aid agreement on Wednesday that promises Israel $38 billion over 10 years, from 2019 through 2028.
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"We affirm today the unbreakable bond between the United States and Israel," U.S. National Security Adviser Susan Rice said at the Washington ceremony.
"On behalf of President Obama, we are all thinking of and praying for President Shimon Peres, Israel's national treasure," Rice continued. "Since 2009, the U.S. provided almost $24 billion in military aid to Israel," she said, adding that "we are proud that no other administration has done so much to enhance Israel's security."
"We can't know what will happen in the next 10 years, but we do know that the U.S. will always be there for Israel," Rice said.
Israel’s Acting National Security Adviser Jacob Nagel spoke after Rice, saying that "Israel does not take the military aid package for granted."
U.S. President Barack Obama issued a special message after the deal was signed, stressing that it demonstrated the U.S.'s commitment to Israel's security in word and deed.
"Both Prime Minister Netanyahu and I are confident that the new MOU will make a significant contribution to Israel’s security in what remains a dangerous neighborhood," Obama said. "The continued supply of the world’s most advanced weapons technology will ensure that Israel has the ability to defend itself from all manner of threats."
"It is because of this same commitment to Israel and its long-term security that we will also continue to press for a two-state solution to the longstanding Israeli-Palestinian conflict, despite the deeply troubling trends on the ground that undermine this goal," Obama continued.
"As I have emphasized previously, the only way for Israel to endure and thrive as a Jewish and democratic state is through the realization of an independent and viable Palestine. Ultimately, both this MOU and efforts to advance the two-state solution are motivated by the same core U.S. objective of ensuring that Israelis can live alongside their neighbors in peace and security."
Senior U.S. administration officials told Haaretz that in the event of an emergency, such as a war, the United States would be prepared to consider increasing the budget for missile defense systems beyond what is promised in the agreement, as it has done in the past.
The defense assistance pact, which has been negotiated intensively since November 2015, was signed at the State Department in Washington by Nagel and U.S. Undersecretary of State for Political Affairs Thomas Shannon, Jr.
Also present at the signing ceremony were U.S. Ambassador to Israel Dan Shapiro and Israeli Ambassador to the United States Ron Dermer.
The following are the main points of the agreement:
Israel will get $3.8 billion dollars annually, $500 million of which will be allocated to developing missile defense systems.
Israel commits not to approach Congress for additional budgets for missile defense systems. In the event of an emergency, Israel can request additional budgets for missile defense systems, but only if the administration agrees to it.
The agreement does not prevent Israel from asking Congress for additional aid on security issues, such as the fight against tunnels or the development of cyber defense systems.
Once the agreement goes into effect, there will be a gradual phasing out of Israel’s right to use 26 percent of the American aid to buy equipment from Israel defense industries.
When the agreement goes into effect, Israel will immediately stop using 14 percent of the American aid to buy fuel for the Israel Defense Forces.
Prime Minister Benjamin Netanyahu issued a statement thanking U.S. President Barack Obama, his administration, Israel's friends in Congress and the American people for their bipartisan support of the aid agreement. He noted that the signing of the deal demonstrates the relationship between Israel and the U.S. is strong and stable.
"This doesn't mean we don't have disagreements from time to time, but those disagreements are within the family," Netanyahu said.
Netanyahu said the disagreements have "no effect whatsoever on the great friendship" between Israel and the U.S., adding that the friendship expressed in the agreement will greatly help Israel continue to fortify its strength over the next decade.
The prime minister said that support for Israel crosses party lines in the U.S., adding that many in the U.S. understand that investment in Israel's security strengthens stability in the unstable Middle East, serving both Israeli and U.S. security.
Senior U.S. administration officials who are familiar with the details of the agreement said that Israel and the United States committed to respecting the level of the grant agreed upon and that any change to the arrangement would require the agreement of both sides. The senior officials said that, nevertheless, they believe that if Israel found itself in an emergency situation, the United States would be prepared to consider additional aid.
“Like any understanding, changes can be introduced by mutual agreement. With regards to missile defense, in an extreme situation or in the event of a major armed conflict involving Israel we would be able to consider changes together if needed. We have proven we have given Israel additional assistance in times of need like Operation Protective Edge in 2014. There is no reason to think this will not be the case in the future, if needed.”
The senior American officials noted that the new aid pact was formulated during a period of very difficult budget pressures in the United States. Even though there have been continuous reductions in foreign aid budgets, the amount give to Israel under the new agreement is more than under the old one – both in nominal terms and in real terms, they said.
One example the American officials gave was the U.S. missile defense budget, which has been cut over the past decade by 7.5 percent. Nevertheless, in the new agreement the Americans agreed to give Israel $500 million to develop missile defense systems, which is more than in the past, when the average assistance for this was $440 million a year, without it being part of a long-term commitment.
One of the most significant disputes during the bilateral negotiations related to the America demand to stop the arrangement that allowed Israel to spend some 40 percent of the American aid to buy equipment from Israeli defense industries and to buy fuel for the IDF. The senior American officials noted that Israel used around $1.2 billion of the annual aid for these purposes instead of buying advanced weaponry from the United States.
“That amounts to a whole squadron of F35 over 10 years,” said one of the U.S. officials. “Now that’s going to go towards building a further arsenal of state-of-the-art U.S. equipment, while simultaneously supporting U.S. industry and jobs. It’s a win-win for Israeli security and the U.S. economy.”