“Arabs may have the oil, but we have the matches”

“Arabs may have the oil, but we have the matches.” – Ariel Sharon

Since the October War in 1973, Washington has provided Israel with a level of support dwarfing the amounts provided to any other state. It has been the largest annual recipient of direct U.S. economic and military assistance since 1976 and the largest total recipient since World War ll. Total direct U.S. aid to Israel amounts to well over $140 billion in 2003 dollars. Israel receives about $3 billion in direct foreign assistance each year, which is roughly one-fifth of America’s entire foreign aid budget. In per capita terms, the United States gives each Israeli a direct subsidy worth about $500 per year. This largesse is especially striking when one realizes that Israel is now a wealthy industrial state with a per capita income roughly equal to South Korea or Spain.
– John J. Mearsheimer and Stephen M. Walt – “The Israel Lobby and U.S. Foreign Policy”

The Yom Kippur War, Ramadan War, or October War, also known as the 1973 Arab–Israeli War, was a war fought by the coalition of Arab states led by Egypt and Syria with Israel from October 6 to 25, 1973. The fighting mostly took place in the Sinai and the Golan Heights, territories that had been occupied by Israel since the Six-Day War of 1967.

On October 6, Secretary of State Kissinger convened the National Security Council’s official crisis management group, the Washington Special Actions Group, which debated whether the U.S. should supply additional arms to Israel. High-ranking representatives of the Defense and State Departments opposed such a move. Kissinger was the sole dissenter; he said that if the U.S. refused aid, Israel would have little incentive to conform to American views in postwar diplomacy. Kissinger argued the sending of U.S. aid might cause Israel to moderate its territorial claims, but this thesis raised a protracted debate whether U.S. aid was likely to make it more accommodating or more intransigent toward the Arab world.

By October 8, Israel had encountered military difficulties on both fronts. In the Sinai, Israeli efforts to break through Egyptian lines with armor had been thwarted, and while Israel had contained and begun to turn back the Syrian advance, Syrian forces were still overlooking the Jordan River and their air defense systems were inflicting a high toll on Israeli planes. It became clear by October 9 that no quick reversal in Israel’s favor would occur and that IDF losses were unexpectedly high.

During the night of October 8–9, an alarmed Dayan told Meir that “this is the end of the third temple.” He was warning of Israel’s impending total defeat, but “Temple” was also the code word for nuclear weapons. Dayan again raised the nuclear topic in a cabinet meeting, warning that the country was approaching a point of “last resort.”

That night Meir authorized the assembly of thirteen 20-kiloton-of-TNT (84 TJ) tactical atomic weapons for Jericho missiles at Sdot Micha Airbase, and F-4 aircraft at Tel Nof Airbase, for use against Syrian and Egyptian targets. They would be used if absolutely necessary to prevent total defeat, but the preparation was done in an easily detectable way, likely as a signal to the United States. Kissinger learned of the nuclear alert on the morning of October 9.

That day, President Nixon ordered the commencement of Operation Nickel Grass, an American airlift to replace all of Israel’s material losses. Anecdotal evidence suggests that Kissinger told Sadat that the reason for the U.S. airlift was that the Israelis were close to “going nuclear”.

Israel began receiving supplies via U.S. Air Force cargo airplanes on October 14, although some equipment had arrived on planes from Israel’s national airline El Al before this date. The airlift continued after the war until November 14. The total cost of the equipment was approximately US$800 million (US$4.26 billion today).

On October 14, a U.N.-Security Council-approved ceasefire brought the fighting to a halt.

But then Israel’s current Prime Minister, Ariel Sharon — who was at the time a major general commanding a division — broke the ceasefire and began to encircle the Egyptian Third Army, opening the way to Cairo.

It was the Soviets’ turn to panic. According to half a dozen former State Department diplomats, Soviet leader Leonid Brezhnev told the United States he might be forced to send in crack troops to back up Egyptian forces defending Cairo. There was plenty of intelligence that elite Soviet paratroop units were on alert and moving.

To halt Sharon, Kissinger raised the state of alert of all U.S. defense forces worldwide. Called DefCons, for defense condition, they work in descending order from DefCon V to DefCon I, which is war. Kissinger ordered a DefCon III.

According to a former senior State Department official, the decision to move to DefCon III “sent a clear message that Sharon’s violation of the ceasefire was dragging us into a conflict with the Soviets and that we had no desire to see the Egyptian Army destroyed.”

Israel, which had cancelled its nuclear alert, went on nuclear alert for a second time, until Meir quickly ended the crisis by ordering her army to stop all offensive action against the Egyptians.

But the same State Department official pointed out something that has always been a major deterrent in the Middle East. “If Tel Aviv had used those weapons, most of the fall-out would have blown back on Israel because of the pattern of prevailing winds at the time,” he said.

And Then The “Unlimited” Supply

Since 1949, the US has given Israel – $126,692,000,000; that is almost $2,000,000,000 per year for 67 years. Israel began buying arms from the United States in 1962, but did not receive any grant military assistance until after the 1973 Yom Kippur War.

The U.S. currently provides Israel almost $10 million in military aid each day, while it gives the Palestinians no military aid.

The Department of Defense Appropriations Act, 2015 (H.R. 4870), which passed the House in June 2014, contained provisions that would prohibit funds made available by the act from being obligated to the PA (§10033) or from being used to transfer weapons to the PA (§10024). Aid to Palestinians is largely designated for the policing of their own people as well as for humanitarian and development needs. Such funds are only authorized once Congress has received proof that they will be used for “non-lethal assistance.” Congress requested $441 million in aid for FY 2015. The U.S. Agency for International Development (USAID) has provided the Palestinian people with some indirect economic assistance through funds distributed to U.S.-based NGOs operating in the West Bank and Gaza. According to the CRS report, “Funds are allocated in this program for projects in sectors such as humanitarian assistance, economic development, democratic reform, improving water access and other infrastructure, health care, education, and vocational training.” The United States also provides funding to the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), “which provides food, shelter, medical care, and education for many of the original refugees from the 1947-1949 Arab-Israeli war and their families—now comprising approximately 4.8 million Palestinians in Jordan, Syria, Lebanon, the West Bank, and Gaza.” The amount allocated by the U.S. government for FY 2014 was $250.9 million.

Israel’s arms industry has become one of the strongest in the world. In 2014, Israel was the 7th largest arms supplier to the world. And it continues to grow stronger. In 2015, Israel sold $5.7 billion in military goods to other countries. The former assistant Secretary of Defense from 2007 to 2009 asked, “How inexplicable is it that we are competing against the Israelis in the Indian defense procurement market at the same time we are subsidizing the Israeli defense industry?”

A U.S. government source estimates that Israel is using approximately $1.2 billion each year (38.7% of the aid it receives from the U.S.) to “directly support its domestic budget rather than to build on its arsenal of advanced US equipment.”

In 2007, the Bush Administration increased the United States military aid to Israel by over 25%, to an average of $3 billion per year for the following ten-year period. The package started in October 2008, when regular aid to Israel’s economy ended. The economy of Israel is technologically advanced by global standards, Israel ranks in the top 18 nations in the world on the UN’s Human Development Index. Annual US military aid amounts to only about 1 percent of Israel’s nearly $300 billion GDP. 

The U.S. currently gives Israel $3,100,000,000 each year; this amounts to $8,500,000 given to Israel each day. Per capita, the U.S. gives each Israeli a direct subsidy worth about $500 per year. Beginning in 2019, the U.S. will give Israel $3,800,000,000 per year until 2028, that is $10,400,000 each day.

Since President Obama took office, the United States has provided Israel over $23.5 billion in Foreign Military Financing (FMF) assistance (from 2009-2016). In FY2016, the United States provided Israel $3.1 billion in FMF assistance; approximately 51.4% of the total U.S. global FMF account. This amounts to $8.5 million in FMF funding alone provided to Israel each day.

The 10-year agreement is the largest in U.S. history, with a significant portion of the money expected to be used to upgrade Israel’s air force to Lockheed Martin’s F-35 fighter aircraft.

Most importantly, it’s structured so that more Israeli defense spending goes to U.S. companies. Israel’s long-standing special arrangement for funds from the United States previously allowed Israel to spend 26 percent of the money in Israel — on Israeli-made defense products. But that provision is being phased out over the first five years of the deal.

The deal states that Israel can’t lobby Congress for more money unless a war breaks out. It says that funds for missile defense are included in the $38 billion — previously, that money was negotiated separately. And it states that Israel can’t use any of the U.S.-provided funds for fuel, meaning more of the aid comes back to U.S. defense manufacturers.

The U.S. State Department referred an inquiry from CNBC to the White House, which said it would not comment on the deal beyond a fact sheet it released online. That document notes that the new agreement for $3.8 billion per year compares with the previous annual allotment of $3.1 billion, and it refers to the new pact as an increase “by every measure.”


Under President Obama’s leadership, the multifaceted cooperation between the United States and Israel has reached unprecedented levels.  This is particularly true with regard to the security of Israel.  The new 10-year security assistance Memorandum of Understanding (MOU) to Israel is the most recent reflection of President Obama’s unshakeable commitment to Israel’s security.

Under the new MOU with Israel, the Obama Administration has made the largest single pledge of military assistance in U.S. history:

  • The total value of the new MOU, which covers FY2019- FY2028, is $38 billion ($3.8 billion per year).  It will succeed the current $30 billion MOU signed in 2007, which will expire at the end of FY2018.
  • This amount represents a significant increase over the current MOU by every measure, and will enable Israel to acquire additional advanced military capabilities from the United States.
  • It includes $33 billion in Foreign Military Financing (FMF) funds and an unprecedented $5 billion commitment in missile defense assistance.  This funding will be disbursed in equal increments of $3.3 billion in FMF and $500 million in missile defense funding each year for the duration of the understanding.
  • In practical terms, the level of funding specified in the MOU will permit Israel to update the lion’s share of its fighter aircraft fleet –  including through the acquisition of additional F-35s – increase its missile defense, and acquire other defense capabilities needed to meet its threat environment.
  • The multi-year missile defense commitment in the MOU will greatly facilitate long-term planning rather than missile defense assistance levels continuing to be appropriated year-to-year.
  • The $500 million in annual missile defense funding under the MOU exceeds the average level of non-emergency support the United States has provided to Israel for missile defense over the last five years.
  • Moreover, our decision with Israel to discontinue two anomalies in the defense relationship that no longer serve our mutual interests – Off Shore Procurement (the arrangement under the current MOU through which Israel has been uniquely permitted to spend 26.3 percent of its annual FMF package within Israel on non-U.S. products) and Israel’s use of FMF funds to purchase fuel – means that Israel will spend more funding, as much as $1.2 billion per year, on the advanced military capabilities that only the United States can provide.  The acquisition of additional U.S.-produced capabilities and technology provide the best means to ensure Israel preserves its Qualitative Military Edge (QME).

Under President Obama to date, Israel has received a record amount of Foreign Military Financing (FMF) funds:

  • Israel remains the leading recipient worldwide of U.S. FMF.  Since President Obama took office, the United States has provided Israel over $23.5 billion in FMF assistance (from 2009-2016).
  • In FY2016, the United States provided Israel $3.1 billion in FMF assistance to support Israel’s ability to defend against threats.  This is in line with assistance provided in FY2014 and FY2015 and represented approximately 51.4% of the U.S. global FMF account in FY2016.
  • For FY2017, which marks the ninth year of the current 10-year, $30 billion MOU between the United States and Israel, the Administration has requested $3.1 billion in FMF for Israel.
  • This amounts to $8.5 million in FMF funding alone provided to Israel each day, helping it bolster its security and maintain its QME.

President Obama has also provided Israel with unprecedented levels of missile defense funding:

  • In addition to FMF funding, under President Obama’s leadership, the United States has provided over $3 billion in missile defense funding for programs and systems for Israel.
  • Since 2011, the United States has provided Israel with over $1.3 billion for the Iron Dome system alone.  Iron Dome batteries and interceptors have saved an untold number of Israeli lives, particularly during the conflict with Hamas in 2014.
  • During that conflict, when Israeli civilians were subjected to rocket fire, the President worked with Congress to successfully provide $225 million in short-fuse funding for the Iron Dome system above the $504 million that had already been provided to Israel in FY2014 for missile defense support.
  • In addition to Iron Dome, the United States has invested significantly in the co-development of longer range defense systems such as David’s Sling and Arrow-3.
  • In FY2016 Israel received $487 million in missile defense support, including for David’s Sling. Arrow-3, and Iron Dome.
  • After successful joint tests of David’s Sling and Arrow-3 last year, FY16 is the first year in which missile defense funding for Israel also included funding for coproduction of these systems– further deepening our missile defense cooperation with Israel.

With over $26 billion in total assistance during President Obama’s tenure in office, Israel has been able to acquire new advanced capabilities to bolster its security:

  • The United States provides Israel with unparalleled access to some of the most advanced military equipment in the world, including the F-35 Joint Strike Fighter.  Using FMF, Israel is scheduled to receive 33 F-35 aircraft, the first two of which will be delivered to Israel in December 2016.
  • Israel will be the first foreign partner to take delivery of this fifth-generation fighter aircraft.
  • The United States has also provided Israel with several C-130 heavy-lift cargo planes; four SAAR 6 Corvettes; ten additional F-15 aircraft; Merkava tanks and Namer Armored Personnel Carriers; Hellfire missiles; the Joint Direct Attack Munition (JDAM) and other Precision Guided Munitions.
  • In terms of missile defense, the United States has paid for the majority of the production costs for the Iron Dome system since 2011, the centerpiece of Israel’s missile defense architecture.

In addition to FMF and missile defense funds, the United States under President Obama has provided other forms of valuable support to Israel:

  • Signed by President Obama in December 2014, the U.S.-Israel Strategic Partnership Act authorizes $3 million to be spent on research pilot programs between Israeli government agencies and the U.S. Department of Homeland Security.
  • The Department of Defense’s chemical-biological defense response units work with the Israel Defense Forces (IDF) to provide equipment and training.
  • The Department of Defense has sold or provided free of charge millions of dollars’ worth of U.S. excess defense articles to the IDF, supporting their need for spare parts, weapons, and simulators to maintain their current fleets.
  • Since FY14, the United States has allocated more than $47 million on research and development task plans for tunnel detection and mapping technologies.

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