Earlier last month, delegations from Israel and the United States held a kickoff meeting to mark the launch of formal talks on a new bilateral defense framework to replace the current 10-year security assistance Memorandum of Understanding (MoU), which is set to expire in 2028. For over half a century, US security assistance to Israel has served as a cornerstone of American strategy in the Middle East.
As policymakers debate the future of foreign aid, it is essential to understand what this partnership has actually delivered, not only for Israel but also for the American defense industrial base, the US economy, and the warfighter. The evidence demonstrates that US assistance to Israel, while significant and deeply valued, is not a mere one-way transfer of resources. It is a strategic investment that returns substantial value to American industry, innovation, and national security.
A brief history of US help to Israel
American assistance to Israel began modestly, after the nation’s founding in 1948, initially comprising economic aid, food assistance, loans, and development support. Military assistance accelerated significantly following the 1973 Yom Kippur War, when Israel’s strategic value to the US, during the Cold War, became undeniable. A conceptual backbone of the assistance has been US commitment to preserving Israel’s qualitative military edge over neighboring militaries. The rationale is that Israel must rely on better equipment and training to compensate for being much smaller in land area and population than most of its potential adversaries.
Over the decades, Israel emerged as one of the largest cumulative recipients of US foreign assistance. The current framework governing this relationship is the 2016 US-Israel Memorandum of Understanding, which covers fiscal years 2019 through 2028 and commits $38 billion over 10 years: $33 billion in foreign military financing grants and $5 billion for missile defense cooperation. Annually, this translates to approximately $3.3 billion in foreign military financing and $500 million for missile defense programs.
Following the October 7, 2023, massacre carried out by Hamas and Israel’s response – that led to Israel’s subsequent wars with Hamas in Gaza, Hezbollah in Lebanon, and the Islamic regime in Iran – the US Congress provided emergency supplemental military assistance and appropriated funding beyond the annual MoU framework for joint US -Israeli missile defense programs.
That support has helped Israel defend against a multifront threat environment while preserving the deterrent posture that has long been central to US policy in the region.
Support the US defense industrial base and strengthen global allies
The US Foreign Military Financing program provides grants and loans to eligible allied and partner nations for the purchase of American-made military equipment, services, and training. Its purpose is to advance US national security interests by strengthening global allies, improving interoperability with US forces, and reinforcing American strategic influence.
At the same time, foreign military financing directly supports the US defense industrial base. A critical fact often overlooked in public discourse is that the overwhelming majority of US security assistance to Israel is spent in the US.
Historically, Israel held a limited offshore procurement privilege; however, the 2016 MoU phases out that exception so that, by fiscal year 2028, essentially all foreign military financing must be spent with US defense companies. This means the funds flow directly to American manufacturers, engineers, supply chains, testing infrastructure, and skilled jobs across dozens of states.
Innovation flows both ways
The US-Israel defense relationship is distinguished by a unique technology feedback loop. Israel’s operational experience is particularly reflected in missile defense, counter-unmanned aerial systems, cyber defense, sensors, electronic warfare, command-and-control unmanned platforms, and advanced manufacturing. That experience generates battlefield-tested knowledge that migrates back into American-produced systems through co-development, licensing, joint production, and formal US acquisition pathways.
In missile defense cooperation, the United States has funded development and production of the Iron Dome, David’s Sling, and Arrow systems in partnership with Israeli industry. Iron Dome co-production has been established on American soil, involving US companies and American workers. The broader lesson is clear: Israeli rapid fielding and operational innovation generate know-how that strengthens US manufacturing lines, enhances American warfighter capabilities, and contributes to the technological superiority of the joint force.
A congressional recognition of this unique relationship can be found in the Fiscal Year 2027 National Defense Authorization Act proposals. If enacted, the relevant provisions would establish the US-Israel Defense Technology Cooperation Initiative, a program designed to expand and accelerate bilateral defense technology research, development, testing, evaluation, coordination, and industrial cooperation between the US and Israel.
Its stated functions include identifying jointly developed or Israeli-origin technologies with operational utility for US systems and programs of record, protecting sensitive technology and information, facilitating transition from research into procurement and acquisition pathways, and creating frameworks for joint ventures, licensing agreements, and US-based co-production. The initiative treats Israel not merely as an aid recipient but rather a source of deployable technology that can be integrated into the American force and produced, scaled, and sustained through the American industrial base.
When viewed through this lens, US security assistance to Israel is more accurately described as a defense industrial investment with strategic returns. It sustains advanced production capacity in the US during periods when domestic procurement alone might not keep critical lines open. It generates export-quality platforms proven in combat. It directly and indirectly supports tens of thousands of skilled American jobs in defense, aerospace, electronics, software, and advanced manufacturing. And it produces operational data and innovation that the US would otherwise need to develop independently at far greater cost.
From aid to alliance: The case for Five Eyes-equivalent status
As policymakers consider the future of traditional grant-based assistance, the conversation should not be about distance or downgrading. It should be about strategic modernization. The Five Eyes alliance comprises the US, UK, Canada, Australia, and New Zealand. Its origins trace to World War II codebreaking cooperation between the US and the United Kingdom before the five-country structure was established during the early Cold War.
Five Eyes countries framework is supported by unusually deep intelligence-sharing, industrial security, and defense-trade arrangements that can reduce friction in classified cooperation, technology release review, and allied defense production, although access remains governed by US law and case-specific security determinations. It is not merely a treaty label. Rather, it reflects decades of institutional trust, shared systems, common operating practices, legal and oversight channels, and unusually close cooperation across intelligence, cybersecurity, defense, and national security policy.
Israel’s relationship with the US already approaches this level of trust in many practical respects. The depth of intelligence cooperation, the integration of defense technologies, the shared operational picture, and the interoperability of forces place Israel among America’s closest security partners.
If the US moves toward concluding traditional grant-based foreign aid to Israel, the replacement should be elevation, not reduction: a Five Eyes-equivalent or analogous statutory and administrative framework providing greater reciprocity, accelerated technology security review, stronger industrial security pathways, and fully integrated defense industrial cooperation.
This proposal acknowledges that Five Eyes membership is not automatic and would require deliberate policy, legal, intelligence, and counterintelligence decisions. The practical path forward begins with a road map toward equivalent treatment in selected domains: trusted facility status for Israeli defense firms operating in the US, streamlined classified contracting protocols, modernized export-control licensing, expanded co-production agreements, and integrated defense innovation pathways that allow both nations to field capability faster.
Advancing to the next level
What began as assistance to a young democratic nation surrounded by enemies seeking its destruction has evolved in recent decades into an effective strategic defense partnership. It is grounded in shared threat perceptions, operational cooperation, intelligence exchange, co-development, and defense-industrial integration that has strengthened the American industrial base.
The US-Israel collaboration has generated technological returns for the US warfighter and sustained a partnership that serves both nations’ security. As the relationship matures, the next logical step is not retreat but integration: the elevation of Israel to a trusted allied status commensurate with the depth of the partnership and the mutual benefits it delivers.
The writer is president of South Florida Women in Defense. The views expressed in this article are her own.