The United States will end its annual $4 billion aid to Israel in 2027 but continue selling weapons to its closest Middle Eastern ally, President Donald Trump has said.
In an interview with Fox News Channel on Tuesday, Trump said Israeli Prime Minister Benjamin Netanyahu had approached him about the proposal and that the two had discussed it for several years.
Trump argued that Israel no longer needed the financial assistance and that the amount was a significant expense for Washington. He also said the aid had become a political issue in the US, with critics using it to challenge American support for Israel.
The announcement drew cautious reactions from Israeli opposition leaders, who called on Netanyahu to explain the implications of the proposed change in the countries' strategic relationship.
Gadi Eisenkot, Netanyahu's main rival and a former military chief, said Israel's defence establishment and public should not learn about such a major shift through the media.
Yair Golan, another opposition leader and former deputy military chief, warned that ending US military assistance would deal a severe blow to Israel's security as it fights on multiple fronts. He said the financial burden of defence would fall on Israeli citizens.
The US has provided Israel with tens of billions of dollars in military assistance over the years. In 2016, then-President Barack Obama signed a 10-year security agreement worth $38 billion, equivalent to $3.8 billion annually.
Under the agreement, Israel's ability to spend part of the assistance on its own military products was due to be phased out, with the funds eventually directed entirely towards American defence industries.
Netanyahu has previously spoken about reducing Israel's dependence on US aid. In an interview with The Economist in January, he said he wanted to gradually phase out military assistance over the next decade.
However, any change would require congressional involvement. Discussions have also taken place on restructuring US-Israeli defence ties through greater cooperation in military technology and weapons production.
A provision in the proposed 2027 National Defence Authorisation Act would expand joint development of defence technology and explore ways to integrate Israeli technology into the US military. The legislation has yet to receive congressional approval.
Some Israeli officials have expressed concern that such cooperation could require Israel to share intellectual property while remaining subject to US restrictions. Meanwhile, Democratic Congressman Ro Khanna has criticised the proposal, arguing that closer military integration could undermine US sovereignty.
Trump said the annual aid had become an easy target for political criticism, particularly among left-leaning voters. He said Netanyahu understood the proposed change.
David Schenker, who served as Trump's top Middle East diplomat during his first administration, said the proposal had been under discussion for a long time. He questioned whether it would significantly influence Republican or Democratic voters.
Ending direct aid also involves obligations under the Camp David peace accords with Egypt, which require the US to provide security assistance to both Israel and Egypt.
Much of the assistance is provided through foreign military financing, which requires Israel to purchase American-made weapons, returning the money to the US economy. A reduction could therefore affect American defence contractors unless Israel maintains similar levels of purchases.
Schenker said a key question was whether the change would affect weapons deliveries and whether Israel would continue to receive priority.
A study published last year found that the administrations of former President Joe Biden and Trump had provided at least $21.7 billion in military assistance to Israel since the Gaza war began in 2023.
Another study by Brown University's Costs of War project estimated that the US had spent around $10 billion more on security assistance and military operations across the broader Middle East during the preceding two years.