Israel and the United States are expected to begin formal talks next month on a new long-term defense assistance framework that would gradually reduce direct American military aid and set Israel on a path toward ending reliance on that funding by 2038.

According to the report, the negotiations will begin roughly two and a half years before the current 10-year memorandum expires at the end of 2028. The existing agreement, signed in 2016 and implemented in 2019, provides Israel with $38 billion over a decade, including $3.3 billion annually for weapons procurement and about $500 million a year for air defense cooperation.

A transition framework instead of the current model

The new arrangement is expected to look fundamentally different from the current one. Rather than maintaining the existing scale of direct military financing, the next framework is being shaped as a transition model that would gradually reduce the amount of American money available for Israeli weapons purchases.

At the same time, both sides are expected to deepen cooperation on the joint development of advanced military technologies intended to preserve their strategic and military edge.

The exact sums, timelines and project scope have not yet been finalized and are expected to be determined during the negotiations.

Focus on advanced weapons development

Defense officials cited in the report said future joint programs could focus on high-energy weapons such as powerful laser systems, improved air defense against expanding threats including hypersonic missiles, and artificial intelligence.

The logic behind the shift is that operational needs are changing rapidly across multiple theaters, requiring greater flexibility in the development of future military capabilities rather than dependence on a fixed aid structure designed years in advance.

Who will lead the talks

The Israeli delegation is expected to be led by Defense Ministry Director-General Amir Baram and include Israeli Ambassador to the United States Michael Leiter, along with representatives from the Defense Ministry, Finance Ministry, the IDF and the National Security Council.

On the American side, the team is expected to be led by Secretary of State Marco Rubio, alongside senior adviser Michael Needham and US Ambassador to Israel Mike Huckabee.

The report said the launch date for the talks was set during Baram’s visit to Washington last month, and that the negotiations are expected to continue for about four months.

Changing political and strategic climate in Washington

The effort to reshape the aid framework comes amid major shifts in the American political and strategic environment. The war in Ukraine has driven unprecedented demand across the US defense industry, reducing the relative importance of Israeli orders for American weapons manufacturers.

At the same time, bipartisan consensus in Washington around military aid to Israel has weakened. Criticism of Israel’s conduct has grown on the left, while a minority of the Republican camp increasingly argue that unconditional support for Israel clashes with the “America First” approach identified with President Trump.

According to the report, these trends have raised growing concern in Israel that long-term reliance on American taxpayer funding can no longer be taken for granted.

Budget pressure on Israel

The report said Israeli defense officials believe Israel will be able to sustain its force buildup plans even without direct US aid, but only through a significant increase in the domestic defense budget.

Israel’s defense budget has already surged to $45 Billion dollars, while the defense establishment is seeking an increase to $62 Billion Dollars. Those demands could rise further if fighting expands again in Iran, Lebanon or Gaza.

The coming decade has also been defined by the Defense Ministry as an especially intensive buildup period, requiring accelerated procurement of fighter jets, refueling aircraft, attack helicopters, naval platforms, satellites and air defense systems.

Under Prime Minister Benjamin Netanyahu’s budget plan, the base defense budget is expected to grow by about $10 billion dollars a year as part of a broader $115 billion dollar increase over a decade

End goal: near-zero direct aid by 2038

One of the central goals of the upcoming negotiations is to create a framework under which direct US financial aid to Israel will be close to zero by 2038.

Until then, Israel will also have to address billions of dollars in existing procurement commitments in the United States that are expected to exceed the current framework by the time it expires in 2028. Those commitments would either need to be absorbed into a new agreement or covered directly by Israel’s own budget.

The expected shift would mark one of the most significant changes in the US-Israel defense relationship in decades, moving from large-scale annual aid toward a model built more heavily on joint technology development and greater Israeli budgetary self-reliance.