Netanyahu says Israel will phase out US military aid; how much does it depend on Washington?

Israel will gradually reduce its dependence on US military assistance, Prime Minister Benjamin Netanyahu's office said on Wednesday, following US President Donald Trump's announcement that Washington would stop providing billions of dollars in annual military aid by the end of this year.

In its latest statement on the issue, Netanyahu's office said Israel was economically strong enough to move away from American assistance and shift towards a partnership based on greater financial independence.

"In 1996, Prime Minister Benjamin Netanyahu said that Israel would gradually phase out American economic assistance, which stood at $1.2 billion," his office said. "He followed through on that commitment."

"Thirty years later, Prime Minister Netanyahu said that Israel's economy is strong enough to gradually phase out American military assistance as well," it added.

The statement described the move as a joint initiative by Netanyahu and Trump, saying it reflected the strength of the relationship between the two countries.

"Today, Israel has a strong and stable economy, and Israel and the United States are taking a significant step towards transitioning from assistance to partnership," the Prime Minister's Office said.

However, his proposed timeline differs from Trump's announcement that the assistance would end by the close of this year. Netanyahu has spoken about phasing it out over the next decade rather than ending it immediately.

The Israeli Prime Minister's Office also cited US Secretary of State Marco Rubio, who said this week that moving away from aid was "a step that the Israelis themselves proposed to us".

Also Read: Andhra a potential destination for UAE's investments: UAE Minister Al Marri

How much US aid does Israel receive?

The United States currently provides Israel with a baseline of $3.8 billion annually in military assistance under a 10-year memorandum of understanding (MoU) covering 2019 to 2028.

Additional military funding has also been approved during major conflicts. Following the outbreak of the Gaza war in October 2023, Washington approved billions of dollars in supplementary assistance, including an $8.7 billion security package in April 2024 to replenish missile interceptors and ammunition.

Trump announced on November 3 that Washington would stop providing around $4 billion in annual military assistance to Israel by the end of this year. The announcement reportedly caught Israeli security and financial officials off guard.

"As far as paying Israel, Bibi Netanyahu and I have made a deal — we give Israel $4 billion a year — we made a deal months ago that we're stopping," Trump told Fox News in a phone interview.

"They're fine with it because they've become a very successful country. They don't need it. And we won't be paying anymore, Israel," he added.

Trump also said Israel had become wealthy enough to purchase American weapons without relying on financial assistance.

The future of US military assistance beyond September 2028, when the current MoU expires, remains under discussion, as an increasing number of voices in both the Republican and Democratic party calling for and end to assistance to the Jewish state.

Washington and Tel Aviv have been discussing a possible successor arrangement that would maintain the $3.3 billion annual Foreign Military Financing allocation for another five years, until 2033, before gradually phasing it out.