JerusalemIsraeli planners misjudged Iran’s Hormuz stranglehold, Netanyahu admitted.
He told a US broadcaster he wants Israel’s $3.8bn annual US aid cut to zero within a decade, replacing it with Gulf alliances.
The existing $38 billion US commitment runs through 2028; no Gulf state has named a replacement figure.
Sources: Reuters, NDTV
THE MOU MECHANISM
US military aid to Israel runs through 10-year Memoranda of Understanding, not annual appropriations. The current MOU, signed by Obama in 2016, locks in $38bn over 2019-2028 — $3.3bn in Foreign Military Financing plus $500m yearly for missile defense. Congress cannot easily cut it mid-term without breaking a presidential commitment.
THE BUY-AMERICAN RULE
Roughly 74% of US aid to Israel must be spent on American defense contractors. The cash flows from Treasury to Lockheed, Boeing, Raytheon, and General Dynamics — not to the Israeli economy directly. Cutting the aid means cutting US factory orders as much as Israeli capability.
THE OSP PHASE-OUT
Until 2016, Israel uniquely could convert about a quarter of its FMF into shekels to spend on domestic defense industries — the Off-Shore Procurement carveout. The current MOU is phasing it out entirely by 2028. Israeli firms like Elbit and IAI have been preparing for this cliff for a decade.
THE QME DOCTRINE
US law (since 2008) requires Washington to maintain Israel's Qualitative Military Edge — a guarantee that Israel can defeat any regional coalition. This is what gates F-35 sales to Gulf states: the UAE's 2020 deal stalled partly over QME review. Replacing US aid with Gulf money does not replace the QME guarantee, which only Washington can confer.
THE GULF ARITHMETIC
Saudi Arabia, the UAE, and Qatar combined spend roughly $110bn/year on defense — most of it on US hardware. Redirecting even a fraction toward Israel is politically impossible under current normalization terms; the Abraham Accords explicitly excluded direct military transfers.
THE PRECEDENT NETANYAHU CITES
Israel's economic aid from Washington — once $1.2bn/year in the 1980s — was zeroed out in 2008 by mutual agreement after Israel's GDP per capita passed $30,000. Military aid was kept and increased. The argument now is to do the same with the military portion: graduate from dependency.