US reaches record $38 bn Israel military aid deal

The United States on Tuesday announced it had reached a record $38 billion package of US military aid with Israel, despite increased disagreement over the Middle East peace process.

The State Department said the pact will be signed on Wednesday and "constitutes the single largest pledge of bilateral military assistance in US history."

A senior Israeli official confirmed that the deal would be for $38 billion over 10 years, up from the $3.1 billion per year the United States pays to its key ally.

It comes despite mounting frustration within President Barack Obama's administration at Israel's policy of building settler homes on occupied Palestinian territory.

Washington has warned that Prime Minister Benjamin Netanyahu's policies are putting at risk hopes of an eventual peace deal.

Just last month, the White House toughened the language it uses to condemn what it sees as a "dramatic acceleration" in Israeli building in the West Bank and East Jerusalem.

Far from backing down, Netanyahu stepped up his rhetoric.

In a video address last week he claimed that Palestinian critics of the settlements support the "ethnic cleansing" of Jews, comments Washington deemed "inappropriate."

But Israel remains the United States' number one ally in the region and the biggest single recipient of US military aid, while also a big customer for US arms exports.

The new deal will last from 2019 through 2028. US and Israeli officials said it would be signed on Wednesday in the Treaty Room of the State Department in Washington.

The current agreement expires in 2018 and Netanyahu's government had earlier reportedly sought as much as $5 billion per year over a decade.

The Israeli premier had called for an increase in part because of the nuclear deal with Israel's arch-foe Iran and the lifting of sanctions that went with it.

Frosty Ties

Beyond the threat from Iran itself, the Israeli leader says the lifting of sanctions will allow Tehran to further back Israeli enemies in the region, such as Hezbollah.

Relations between Netanyahu and Obama have been frosty, but both leaders have had an interest in putting aside their disagreements and reaching a deal.

Obama has sought to demonstrate his support for Israel's security after facing criticism from Republicans at home who accuse him of falling short.

"The next decade of American military support for Israel is spelled out in a memorandum of understanding our countries have been discussing in recent months," US ambassador to Israel Dan Shapiro said this week.

He quoted US National Security Advisor Susan Rice as saying "the new agreement with Israel... will be the single largest military assistance package -- with any country -- in American history."