Annual US Aid to Israel: FMF, Missile Defense, and Conditions

Annual U.S. aid to Israel runs about $3.8 billion in a normal year, all of it military. That figure comes from a ten-year agreement covering fiscal years 2019 through 2028, and it breaks into $3.3 billion in Foreign Military Financing grants and $500 million for cooperative missile defense.¹ In crisis years the total climbs sharply. Fiscal year 2024 reached roughly $12.5 billion once Congress added emergency supplemental appropriations after the outbreak of the Israel-Hamas war.²

The Agreement Behind the Annual Number

The baseline is set by a Memorandum of Understanding signed in 2016 by the Obama administration and the Netanyahu government. It commits the United States to $38 billion in military assistance across ten years: $33 billion in FMF and $5 billion for missile defense cooperation.³

The MOU is a non-binding executive pledge rather than a statute. Congress still appropriates the funds each year, but lawmakers have treated the $3.8 billion figure as the baseline for every annual spending bill since 2019.⁴ Negotiations over what happens after FY2028 have not formally begun.⁵

Foreign Military Financing: $3.3 Billion a Year

FMF is the largest single line. It’s a grant, not a loan, and Israel uses it to buy American-made defense equipment and services.¹ The legal authority sits in the Arms Export Control Act, which lets the president finance foreign procurement of defense articles.⁶

Israel is the largest FMF recipient in the world. The money funds procurement of advanced weapons systems, most prominently the F-35 Lightning II fighter jet, with Israel committed to buying 75 in total. FMF also covers precision-guided munitions, transport aircraft, and other equipment that keeps the two militaries interoperable.

The Lump-Sum Feature

Since 1991, Congress has required that Israel’s entire annual FMF allocation be disbursed within 30 days of the spending bill’s enactment. No other country receives FMF this way. The FY2026 appropriations bill continues the requirement, directing that the full $3.3 billion “shall be disbursed within 30 days of the date of enactment.”⁷ Because Israel receives the money upfront, it can hold the balance in interest-bearing U.S. Treasury securities while drawing down for purchases over the year.

Off-Shore Procurement Is Phasing Out

For decades Israel had a privilege no other FMF recipient enjoyed: spending part of its American military aid on its own defense industry, a practice called Off-Shore Procurement. Under the previous MOU, up to 26.3% of Israel’s FMF — roughly $870 million a year — could go to Israeli-made equipment.³

The current MOU is winding that down. FY2025 set OSP at $450.3 million, about 13.6% of the $3.3 billion.⁵ The FY2026 bill drops it further to $250.3 million, roughly 7.6%.⁷ By FY2028, OSP reaches zero and all FMF will go toward purchases from American manufacturers.¹

Cooperative Missile Defense: $500 Million a Year

The second stream is $500 million annually for joint missile defense development. Unlike FMF, these funds run through the Department of Defense budget under the annual National Defense Authorization Act rather than the State Department.⁵ The Missile Defense Agency manages three programs targeting threats at different altitudes and ranges.⁸

Iron Dome intercepts short-range rockets and mortars. The FY2025 NDAA authorized up to $110 million for U.S. co-production of its components.
David’s Sling covers medium-range threats such as cruise missiles and large rockets, with up to $40 million authorized for U.S. co-production.
Arrow 2 and Arrow 3 form the upper tier, designed to intercept ballistic missiles at high altitude. The FY2025 NDAA authorized up to $50 million for U.S. co-production of Arrow 3 interceptor components.

Congress increasingly requires that components of these jointly developed systems be built on American soil. The remaining $300 million of the $500 million pledge goes toward broader research, development, testing, and general defense cooperation between the two countries.⁵

When Congress Adds Emergency Money on Top

The MOU sets a floor, not a ceiling. When events warrant, Congress can appropriate billions above the baseline. Fiscal year 2024 shows the pattern clearly. After the October 7, 2023 attack, Congress passed an emergency supplemental in April 2024 (P.L. 118-50) with $3.5 billion in additional FMF plus $5.2 billion in defense appropriations — $4 billion for missile defense replenishment and $1.2 billion for Iron Beam, a new laser-based system.²

Add the supplementals to the $3.3 billion FMF and $500 million missile defense baselines, and FY2024 total obligations reached about $12.5 billion, more than triple the usual annual figure.² FY2025 returned to the $3.8 billion baseline under a full-year continuing resolution.⁵ Supplementals stack on top of the MOU rather than replacing it, which is why the $38 billion ten-year headline figure understates actual spending in any year with a major appropriation.

Conditions on the Money

U.S. aid to Israel comes with legal restrictions and monitoring requirements that apply to how recipients use American defense articles and funds.

The Leahy Law

Under the Leahy Law, no U.S. security assistance may go to any foreign military unit when the Secretary of State has credible information that the unit committed a gross violation of human rights. The prohibition lifts only if the recipient government takes effective steps to bring the responsible individuals to justice.⁹ A parallel provision in the defense code applies the same rule to Department of Defense assistance. Vetting is done by U.S. embassies and the Bureau of Democracy, Human Rights, and Labor before aid is delivered. The government does not publicly disclose which units, if any, have been cut off.

Section 620I on Humanitarian Access

Section 620I of the Foreign Assistance Act prohibits security assistance to any country whose government restricts, directly or indirectly, the delivery of U.S. humanitarian aid. The law does not require a total blockade — even partial restrictions can trigger the prohibition.¹⁰ The president can waive the restriction by finding that continued assistance serves the national security interest, with prior notice to the relevant congressional committees.

In February 2024, President Biden issued National Security Memorandum 20, requiring the State Department to obtain written assurances from weapons recipients that they would comply with international humanitarian law and not restrict U.S. humanitarian deliveries. Israel provided those assurances in March 2024, and the State Department accepted them.

End-Use Monitoring

The Arms Export Control Act requires the U.S. government to monitor how foreign recipients actually use American defense equipment. Two programs handle this. Golden Sentry, run by the Department of Defense, covers government-to-government transfers like FMF purchases, with Security Cooperation staff at U.S. embassies conducting scheduled inspections, physical inventories, and reviews of accountability records. Blue Lantern, managed by the Directorate of Defense Trade Controls, handles direct commercial sales through pre- and post-shipment checks. Recipients must agree not to transfer equipment to third parties without written U.S. authorization, not to use equipment for purposes other than those specified, and to maintain security comparable to what the U.S. government would provide.¹¹

What the Annual Package Does Not Include

All current U.S. aid to Israel is military. Bilateral Economic Support Fund grants, which Israel had received since 1971, ended in FY2008 after being phased down under the first MOU.¹² One small non-military remnant continues: roughly $5 million a year from the State Department’s Migration and Refugee Assistance account, which flows through the United Israel Appeal to the Jewish Agency for Israel to support immigrant absorption, primarily for Jewish migrants from Ethiopia. By agreement with the State Department, those funds may only be used for facilities inside Israel’s pre-June 1967 borders.⁵

1
United States Department of State. U.S. Security Cooperation with Israel
2
Congress.gov. U.S. Foreign Aid to Israel
3
The White House. Fact Sheet: Memorandum of Understanding Reached with Israel
4
U.S. Department of State. Ten-Year Memorandum of Understanding Between the United States and Israel
5
Congress.gov. U.S. Foreign Aid to Israel: Overview and Developments Since October 7, 2023
6
Office of the Law Revision Counsel. 22 USC 2763 – Credit Sales
7
Congress.gov. H.R. 7006 – Financial Services and General Government Appropriations Act, 2026
8
Missile Defense Agency. PE 0603913C: Israeli Cooperative Programs
9
Office of the Law Revision Counsel. 22 USC 2378d – Limitation on Assistance to Security Forces
10
Office of the Law Revision Counsel. 22 USC 2378-1 – Prohibition on Assistance to Countries That Restrict United States Humanitarian Assistance
11
United States Department of State. End-Use Monitoring of U.S.-Origin Defense Articles
12
Congress.gov. U.S. Foreign Aid to Israel