Lieberman, Kahlon Press Netanyahu to Accept U.S. Aid Package Offer

After Lieberman and U.S. defense chief Carter discuss proposed deal, senior Israeli official says agreement must be reached soon so the Israeli military may cover its multiyear plan.

Netanyahu and Lieberman at the Knesset on May 30, 2016.
Ronen Zvulun/Reuters

Defense Minister Avigdor Lieberman and Finance Minister Moshe Kahlon are putting pressure on Prime Minister Benjamin Netanyahu to finalize a new U.S. defense aid deal as soon as possible. But Netanyahu is still not hastening to sign one and is still pursuing talks with Washington.

The dispute among the three went public for the first time on Monday.

Netanyahu decided a few months ago to focus all the contacts with the Americans over the deal in the Prime Minister's Office. Yaakov Nagel, acting National Security Adviser, has been in charge of these talks which he holds with Susan Rice, the U.S. National Security adviser , and Yael Lempert, who is in charge of the "Israel file" at the White House.  

The Defense Ministry, IDF and Treasury were left out of many of these contacts and have received only partial updates.

Lieberman met on Monday in Washington with U.S. Defense Secretary Ashton Carter, in what was their first meeting since Lieberman was named defense minister last month. The defense aid package came up in their discussion despite the fact that neither of them directly handle the issue.

Following the meeting, a senior Israeli official said in a briefing to reporters in Washington that it is important to close a deal soon so as to ensure the IDF and Defense Ministry can cover their multiyear plan.

"I hope we will soon conclude an agreement," the senior Israeli official said. "We can bridge the differences including over the missile shield funding. Our interest, because the IDF is moving to a multiyear plan, is to agree soon, irrespective of which administration it is or the U.S. elections. What is important is to have certainty."

The briefing seemed to echo Kahlon's remarks at the start of his Kulanu faction meeting in parliament

"I know the figures," Kahlon told his Kulanu Party's Knesset caucus on Monday. "The agreement is positive. There is always something that can be improved, but the defense apparatus can definitely make do with the current proposal."

"There's no reason for us to take steps that will be interpreted as intervention in the internal affairs of the U.S.," Kahlon added..

The U.S. and Israel signed their last military aid agreement in 2007. In that deal, which expires at the end of 2018, the United States promised Israel $30 billion over the course of 10 years, an average of $3 billion a year. Negotiations on the new 10-year agreement began in November 2015.

Netanyahu rejects the criticism and the pressure. Sources in the Prime Minister's Office said that the negotiations are being run exclusively by Netanyahu and his close advisers and only they know all the details.

"The negotiations are being conducted rationally and responsibly and in the end we will bring a good result," a senior official in Netanyahu's office said.

"The prime minister thinks he can achieve a better deal than what is on the table now and we believe that we shall soon reach a decision."

Nagel said on June 15, two weeks after his most recent visit to the White House that: "The atmosphere is good with the Americans, there is no cold shoulder nor any conflict or problem." 

Israel and the U.S. are still at loggerheads over several issues pertaining to the aid package. First of which is the size of the aid: Israel is asking for 40 to 50 billion dollars over 10 years and the U.S. is offering $34-37 billion for that period. The U.S. is ready to raise the sum to 40 billion for ten years if Israel agrees not to seek extra funding from Congress, but Jerusalem has so far rejected those terms.

Another issue still at odds is the portion of the package Israel could use to purchase its own locally produced military equipment. Currently it may use 26.3 percent of annual U.S. aid for local purchases, which is about $800 million. The Americans want to reduce this sum gradually with the aim of bringing it down to zero in the coming years, a goal Israel firmly opposes.

Senior Israeli and American officials have said in recent days that the talks have come close to exhausting themselves and that Netanyahu must decide within a few weeks whether or not to sign a deal with U.S. President Barack Obama.

In his remarks last week, Nagel said that "Netanyahu wants to achieve an agreement with the Obama administration, but not at any price."