Croatia's government has approved the purchase of 12 used Israeli F-16 fighter aircraft in a package worth $500 million.
The deal, which includes the training of pilots in Israel, aircraft armament, a training simulator and the construction and equipping of facilities at Croatia's military airports, is lead by Israel Ministry of Defense in cooperation with the Israeli Air Force along with Elbit and Israel Aerospace Industries.
Netanyahu said the deal shows the strength of the Israeli defense industry and strengthens the existing ties between Israel and Croatia.
"The Israeli defense industry proves, once again, that it is the best in the world," he said. "This agreement will strengthen the existing ties between Israel and Croatia in the fields of security, defense, and economics. This deal will strengthen Israel's air force and Israel's security at large."
Croatia's Defense Minister Damir Krsticevic says "this is a historic day for the Croatian air force and an investment into the security of the Republic of Croatia."
The sum will be paid in 10 annual installments.
NATO member Croatia faces a mini arms race with Russian ally Serbia, which recently received six used Russian MiG-29 fighter jets.
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AP contributed to this report