Israel is preparing to overhaul one of the bedrock elements of its relationship with the United States: the decades-old security aid program that supplies Jerusalem with billions of dollars in American defense assistance every year. Prime Minister Benjamin Netanyahu said that Israel is poised to move toward “much greater independence,” declaring that he expects to soon announce a plan to reduce the country’s reliance on U.S. funding.

For half a century, the United States has transferred billions annually to Israel for defense needs, a policy first forged in the aftermath of the 1973 Yom Kippur War. But under current terms, nearly all of the roughly $3.8 billion per year must be spent exclusively on U.S.-made weapons—effectively turning the aid into a subsidy for the American defense industry. Israeli officials say that model is increasingly outdated as Israel’s economy expands, weapons technology advances globally, and pushback against the aid package grows in Washington.

According to sources involved in internal deliberations, Israeli defense and diplomatic officials are actively considering transforming the relationship into something fundamentally new—not a continuation of “aid,” but a partnership focused on joint weapons development, military tech cooperation, and co-production agreements. One possibility under review is replacing direct financing with bilateral industrial frameworks similar to the U.S.-Israel joint missile projects or Israel’s expected participation in President Donald Trump’s Golden Dome air defense initiative.

“People call it ‘aid,’ but in reality, these have been cooperative frameworks for years,” a senior official told Israel Hayom. “Israel is worth five CIAs to the U.S. The money comes from American taxpayers but cycles right back into the U.S. economy. It may be time to move to something different.”

Meanwhile, U.S. officials—including pro-Israel members of Congress—have begun pressing Jerusalem for clarity, warning that negotiations must begin soon to avoid a lapse when the current Memorandum of Understanding expires in 2028.

The debate is now spilling into Israeli politics. Opposition leader Yair Lapid urged a timely discussion of the next agreement but would not say whether Israel should break with tradition. Former IDF chief of staff Benny Gantz argued that the U.S. package remains mutually beneficial, calling it not only assistance, but “an investment.”

Gantz cited the recent American strike on an Iranian nuclear facility: “Who opened the skies? Who provided the intelligence? It was Israel. That’s the benefit of this cooperation.”

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