Statement confirms terms of new $38 bln Israel aid package

Although not signed yet, the U.S. State Department noted that the agreement will be signed on Wednesday, and "constitutes the single largest pledge of bilateral military assistance in USA history".

This evening, the USA approved its military aid agreement, in which it will transfer $38 billion to Israel over the course of the next ten years.

The signing ceremony will take place on Wednesday, the State Department said.

Obama administration officials say US security cooperation with Israel has reached record levels over the a year ago despite the disputes with Netanyahu's government.

WASHINGTON (AP) - The United States on Wednesday signed an unprecedented new security agreement with Israel that will give the Israeli military $38 billion over 10 years.

And unlike previous deals, the arrangement will also see the phasing out of a clause which allowed Israel to spend part of its USA aid on its own defence industry, instead of on weapons made in America.

The deal will be the third such agreement between the two countries, with the first in 1998 securing $21.3 billion in military aid for Israel.

Israel and the United States are bound closely by historic and cultural ties as well as by mutual interests.

US lawmakers in recent years have provided Israel with up to $600 million in discretionary funding for missile defense. US President Barack Obama's national security advisor Susan Rice was also present at the ceremony.

In March 2015, Netanyahu addressed US Congress during which he thanked Obama for his support of Israel while at the same time criticized the Iran nuclear agreement because it would "not block Iran's path to the bomb".

But when President Barack Obama first put the groundbreaking offer on the table a year ago, Netanyahu refused to enter into negotiations on grounds that it would signal his support for the Iran nuclear agreement, which he bitterly opposes. A significant one was an agreement by Netanyahu for Israel not to pursue additional aid during the term of the agreement.

The funds will be disbursed in equal amounts of $3.3 million to purchase goods and services, and $500 million a year dedicated to Israel's missile defense systems, which protect the small nation from possible attacks by militant groups Hezbollah in Lebanon and Hamas in the Gaza Strip.

The record arms package, which concluded ten months of negotiations, prohibits Israel from lobbying the U.S. Congress for more money in missile defence beyond that promised in the Memorandum of Understanding, something Israel bitterly opposed. Netanyahu's strategy of threatening to wait and negotiate with the next administration ended after the staggering loss suffered by the coalition of American Conservatives and Republicans, and joined by Netanyahu, to prevent the nuclear development deal with Iran.

Even with a higher overall level of defense aid, he said, blocking the government's ability to spend the money in Israel would cut hundreds of millions of dollars out of the local industry. American lawmakers have given Israel about $600 million in annual funds for this objective in recent years.

Talks over the deal - which will come into effect in 2019 - had previously faltered over these issues, as well as disagreements about the size of the aid package.

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