Isabella Carter
Israel's foreign minister is looking to spend $150 million on public diplomacy in 2025, a figure that is over 20 times the budget before the war began in 2023. This money will be spent on media campaigns abroad, in the foreign press, on social media, and more, including concentrated activity on U.S. campuses to change their attitude towards Israel and its policies. While the exact allocation of the budget is yet to be decided, it is clear that Israel's allies, particularly the United States, play a significant role in its diplomacy and foreign relations. The U.S. has provided substantial military aid to Israel, with a total of $225.2 billion in adjusted inflation since 1951, and has committed to various cooperation agreements. Other countries, such as Serbia and the Netherlands, have also contributed to Israel's military capabilities through arms sales and exports.
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What You'll Learn
US economic aid to Israel
The United States has long been a major provider of economic and military aid to Israel, and the two countries have a strong and enduring commitment to a strategic economic partnership. Since 1949, the US has provided over $50 billion in economic and military aid to Israel, more than to any other country.
US security aid to Israel serves two main purposes: bolstering Israel's defence capabilities against terrorist threats and fortifying US geopolitical interests in the Middle East. Israel is the only democracy in the region and is constantly under attack. For example, on October 7, Hamas terrorists staged an attack, killing more than 1,200 people, kidnapping 240 others, and firing thousands of rockets.
In 2023, the US disbursed more than $7 billion in military assistance to countries around the world, including Israel. The Trump Administration also approved nearly $12 billion in major FMS sales to Israel and provided approximately $4 billion in expedited military assistance. The US and Israel also engage in longstanding intelligence cooperation, sharing information on common security threats, collaborating on technology development, and coordinating efforts in areas such as counterterrorism.
In addition to military aid, the US has also provided economic aid to Israel. For example, in 1985, Congress approved $1.5 billion in economic aid to rescue the Israeli economy, the largest economic aid package for one country since the Vietnam War. In 1988, the US and Israel signed a five-year Memorandum of Agreement on strategic, economic, and military cooperation. The US has also provided economic aid to Israel in the form of grants and "forgiven" loans.
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US military aid to Israel
The United States is a longstanding economic and military partner of Israel. In 2023, the US disbursed more than $7 billion in military assistance to countries around the world, including Israel. The US views its security aid to Israel as serving two main purposes: bolstering a key ally's defence capabilities against terrorist threats and fortifying its geopolitical interests in the Middle East.
The US has committed to providing Israel with $3.8 billion per year in military aid, negotiated in 2016 by the Obama administration. This is the largest such agreement between the US and any other country. In 2024, the US Secretary of State, Marco Rubio, announced that the Trump Administration would expedite approximately $4 billion in military aid to Israel. This was to be provided in addition to the $12 billion in major FMS sales to Israel approved by the Trump Administration since taking office.
In 2025, the Biden administration prepared an aid package of $2 billion in additional funding to support Israel in its potential resumption of fighting in Gaza. President Biden urged Congress to increase military aid to Israel, and on October 18, he announced that the additional funds would total $14 billion as part of a larger military aid package that also addressed Ukraine, Taiwan, and US border security.
The US has also sent shipments of weapons and equipment to Israel, including 15,000 bombs and 57,000 155mm artillery shells, as well as thousands of other munitions. The US has further supported Israel by sending naval warships, aircraft, and special operations forces to cooperate with the Israeli military in planning and intelligence.
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US-Israel cooperation agreements
The United States has been a longstanding provider of funding, training, military equipment, and weaponry to Israel. Since its founding in 1948, the US has provided Israel with over $130 billion in bilateral assistance, including $6.6 billion worth of equipment under the Excess Defense Articles program. The US has also signed multiple bilateral defense cooperation agreements with Israel, including:
- A Mutual Defense Assistance Agreement (1952)
- A General Security of Information Agreement (1982)
- A Mutual Logistics Support Agreement (1991)
- A Status of Forces Agreement (1994)
The US and Israel also have a strong economic partnership, with the US-Israel Free Trade Agreement established in 1985 being the first free trade agreement entered into by the US. Since then, trade between the countries has increased tenfold, reaching $49 billion in 2016. Israelis now invest close to $24 billion in the US, and US firms have established two-thirds of the foreign-invested research and development centers in Israel.
In addition to security assistance and arms sales, the US and Israel participate in a variety of exchanges, including military exercises, joint research, and weapons development. The US also maintains the US War Reserve Stockpile in Israel, which can be used to boost Israeli defenses in the event of a significant military emergency.
The US and Israel have also established cooperation programs in other areas, such as energy and water. BIRD Energy, established in 2009, promotes bilateral cooperation in clean renewable energy technologies. In the area of water, Israelis are working closely with Americans, especially in the Southwestern United States, to help address water challenges using breakthrough technologies in desalination, recycling, conservation, management, and irrigation.
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US-Israel economic relationship
The United States and Israel have a strong economic relationship, with the US providing financial, military, and political support to Israel. This relationship is driven by mutual benefits, such as driving growth and prosperity, as well as shared interests in the Middle East.
Trade and Investment
The United States and Israel signed their first free trade agreement in 1985, marking the first free trade agreement for both countries. Since then, trade between the two nations has increased significantly, reaching a total of nearly $50 billion by 2023. Israel is the 23rd largest trading partner of the US, while the US is Israel's largest trading partner.
US firms have played a significant role in Israel's economic development, with American companies establishing two-thirds of the foreign-invested research and development centers in the country. Israel is home to more than 2,500 US firms, employing about 72,000 Israelis. Additionally, thousands of jobs are supported indirectly through these employers.
Israeli firms, on the other hand, represent the second-largest source of foreign listings on the NASDAQ, surpassing Indian, Japanese, and South Korean firms combined. Israeli companies have also shown interest in further opening trade relations with the US, as seen by their investment of close to $24 billion, nearly triple what it was a decade earlier.
Security and Military Aid
The US provides substantial security and military aid to Israel, serving the dual purpose of bolstering Israel's defense capabilities against terrorist threats and advancing US geopolitical interests in the Middle East. This aid comes in the form of funding, training, military equipment, and weaponry. In 2016, the Obama administration negotiated an agreement to provide Israel with $3.8 billion annually, making it the largest such agreement between the two countries.
In 2023, the Trump administration announced the fast-tracking of approximately $4 billion in military aid to Israel, demonstrating the continued commitment of the US to Israel's security. Additionally, the US and Israel engage in intelligence cooperation, sharing information on security threats and collaborating on technology development and counterterrorism efforts.
Political Support
The US has provided large-scale political support to Israel, using its United Nations Security Council veto power to protect Israel from resolutions condemning the country. Out of 83 times the US has used its veto power, 42 times were in support of Israel, with 15 out of 24 vetoes invoked between 1991 and 2011 being used to protect Israel.
The US has also taken steps to recognize Israeli sovereignty in certain territories, such as recognizing Jerusalem as the capital of Israel and moving its embassy there from Tel Aviv in 2018. Additionally, the US has designated Israel as a major non-NATO ally, a designation shared by Egypt in the Middle East.
Economic Stabilization and Development
The US and Israel have also worked together on economic stabilization and development initiatives. The creation of the US-Israel Joint Economic Development Group (JEDG) played a crucial role in reinvigorating the Israeli economy and setting it on a path of rapid growth. This group established three joint research and development foundations, namely the Binational Industrial Research and Development Foundation (BIRD), the Binational Science Foundation (BSF), and the Binational Agricultural Research and Development Foundation (BARD).
These foundations have granted millions of dollars in funding, generating billions in sales and promoting bilateral cooperation in clean and renewable energy initiatives. Additionally, the US has extended loan guarantees to Israel, assisting with housing shortages, the absorption of new immigrants, and economic recovery.
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US-Israel joint research and development foundations
The United States and Israel have a strong history of cooperation in science, technology, and innovation. The two countries have established several joint research and development foundations, including the Binational Industrial Research and Development Foundation (BIRD), the Binational Science Foundation (BSF), and the Binational Agricultural Research and Development Foundation (BARD). These foundations provide mechanisms for bilateral cooperation in various sectors, including science, agriculture, and technology.
The BIRD Foundation, established in 1977, provides capital for joint industrial research and development between American and Israeli companies. Each BIRD project involves a partnership between a US and an Israeli company, with BIRD funding up to 50% of the project's R&D expenses (up to $1 million per approved project). Since its inception, BIRD has approved more than 900 projects and provided over $300 million in grants, leading to an estimated $10 billion in sales.
The BSF, founded in 1972, promotes scientific relations between the US and Israel by supporting collaborative research projects in basic and applied scientific fields. The BSF has awarded over $1 billion to more than 5,500 research projects, leading to significant scientific, medical, and technological breakthroughs. One notable example is the worldwide use of PET (Positron Emitting Tomography) to identify functional disorders indicating cancer.
The BARD Foundation, along with the US-Israel Education Foundation, facilitates economic cooperation between the two countries. The Joint Economic Development Group (JEDG) is convened annually to discuss the economic partnership and potential initiatives. Additionally, the Middle East Regional Cooperation Program (MERC) promotes scientific cooperation and technology-led development between Israel and the Middle East and North Africa (MENA) region through grants and workshops.
The US and Israel have also expanded their cooperation in other areas, such as civil aviation, public health, renewable energy, and space exploration. The two countries have signed agreements and committed to developing further partnerships, strengthening their relationship and laying the groundwork for future scientific advancements.
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Frequently asked questions
Israel's allies spend varying amounts on diplomacy with Israel. The United States, Israel's largest trading partner, has provided \$317.9 billion in foreign aid since 1951, making Israel the largest recipient of American foreign aid since World War II. In 2022, the US committed $12.4 billion in foreign aid to Israel, the second-largest amount that year after Ukraine. In addition to financial support, the US engages in scientific and cultural exchanges with Israel, as well as joint military exercises, military research, and weapons development.
The Trump Administration has been particularly supportive of providing military aid to Israel, with Secretary of State Marco Rubio signing a declaration to fast-track approximately $4 billion in military assistance. The Biden Administration has also provided significant support, with a total of \$14 billion in military aid packages announced in October 2024.
Israel has consistently been one of the top recipients of US aid in the Middle East, along with countries like Afghanistan, Jordan, Egypt, and Iraq. US aid to Israel serves the dual purpose of bolstering its defense capabilities against terrorist threats and advancing US geopolitical interests in the region.
