The Bush administration will ask Congress to approve $2.22 billion in military aid to Israel in 2005. Israel will receive $1.96 billion in military in 2004. The increase is based on the 1996 US decision to reduce US civilian aid to Israel- then amounting to $1.2 billion - by $120 million a year while increasing military aid by $60 million a year.
Israel's procurement of F-16I combat jets is the largest item in the US military aid budget, at $4.5 billion. It is the largest arms deal in Israeli history.
Israeli and US officials held several meetings in Washington in recent days, at which Israel asked for special aid to preserve its qualitative edge against threats to the country. The US Department of State announced that it would seek funding for this purpose, and that it planned to participate with Israel in several R&D programs. One of these programs is the M-THEL short-range missile and Katyusha rocket interception system, formerly known as Nautilus.
In addition to the annual military aid, the US has promised Israel $9 billion in loan guarantees over the next three years. The US and Israel agreed that US will deduct specific amounts from the guarantees for Israeli spending in the territories. The US agreed to allow Israel to begin raising loans before the final decision on the amount of the deduction is made.
The US argues that the aid to Israel is based on the fact that "Israel's economy is not efficient enough, forcing it to rely on external aid and loans for its security." Israel has received $3 billion a year in US military and civilian aid since 1985. However, the civilian aid will be eliminated altogether in 2008, in exchange for an increase in military aid. Israel has been the largest recipient of US aid since 1976, and has received more money from the US than any other country since World War Two.
Published by Globes [online] - www.globes.co.il - on November 4, 2003