The $2.3 billion mystery arms deal Israel won’t explain
A decade-long, Elbit-led deal with a foreign state highlights the growing tension between secrecy, exports, and military advantage.
The largest and most opaque sale in Elbit Systems’ history, reported by the company about a month ago, was signed with a foreign country and centers on a strategic defense system based on unique and groundbreaking technology, Calcalist has learned.
The deal is valued at approximately $2.3 billion, making it one of the largest and most significant transactions ever signed by Israel’s defense industries. It was concluded with the mediation and full involvement of Israel’s Ministry of Defense and is expected to span roughly a decade.
The identity of the country involved, as well as the nature of the system at the heart of the deal, are subject to strict publication bans. According to sources, these restrictions were imposed in part by the foreign customer, which stipulated that disclosure of any details would lead to the immediate cancellation of the contract. In a deliberately vague filing to the stock exchange shortly after the agreement was signed, Elbit described the transaction merely as a “strategic solution with an international customer.”
The unusual scope of the transaction, and the deep involvement of Israel’s Ministry of Defense in selling an advanced strategic system to a foreign country, raises pointed questions about the preservation of Israel’s qualitative military advantage in the Middle East. These questions have intensified in recent weeks amid growing concern within the IDF and the Israeli Air Force over the potential sale of 48 F-35 stealth fighter jets to Saudi Arabia by the United States.
In that case, Israeli defense officials have warned that supplying the aircraft, manufactured by Lockheed Martin, under understandings reportedly reached between US President Donald Trump and Saudi Crown Prince Mohammed bin Salman could erode Israel’s absolute aerial superiority in the region. At present, Israel is the only country in the Middle East operating the F-35. The Israeli Air Force has already absorbed nearly two squadrons of the fifth-generation aircraft and is preparing to establish a third squadron in the coming years, with plans for a fourth over the next decade.
Against this backdrop, Elbit’s secretive deal places Israel in an awkward and potentially embarrassing position: approving the export of an advanced, strategic system while simultaneously warning that similar moves by allies could undermine its military edge. Both Elbit Systems and the Ministry of Defense declined to respond to Calcalist’s questions regarding the transaction, citing its sensitivity and classified nature.
Elbit Systems is one of the IDF’s primary weapons suppliers and leads numerous development programs for advanced military technologies, ranging from loitering munitions and unmanned aerial vehicles to intelligence, electro-optical, and artillery systems.
In its third-quarter results published last month, Elbit reported a 12% increase in revenue and a record backlog of $25.2 billion, reflecting unprecedented global demand for weapons. During a post-earnings call, President and CEO Bezhalel Machlis addressed a Calcalist question regarding the potential normalization of relations between Israel and Saudi Arabia and its implications for the company.
“The Abraham Accords opened additional opportunities for Elbit,” Machlis said. “Any country that joins these agreements, including Saudi Arabia, which has very large defense budgets, clearly creates new opportunities for us.”
Yet despite these remarks, significant uncertainty surrounds the mechanisms meant to safeguard Israel’s security interests in the advanced system at the center of Elbit’s undisclosed deal, particularly given the intense global interest in the capabilities such systems provide.
The transaction did not take place in isolation. Israel is actively encouraging new state-to-state security agreements as a way to finance the adaptation of its defense industries for future conflicts, with a focus on Iran. These efforts include funding the fortification of defense manufacturing infrastructure, expanding production lines, and making large-scale investments in research and development to ensure future capabilities for the IDF.
The state plans to significantly expand such agreements in the coming years. Over the past year alone, 21 Israeli arms deals were signed under this framework. In parallel, a reform led by the Ministry of Defense to streamline export controls, scheduled to take effect next year, is expected to further ease arms sales abroad.
In practice, Israel is seeking to channel funding into its defense industries through export deals rather than relying on direct state financing, following the depletion of government reserves after two years of regional war.
This marks a fundamental shift in strategic thinking, shaped by the emerging balance of power in the Middle East, Trump’s regional plans, and the growing influence of countries such as Turkey, Qatar, and Saudi Arabia. Yet even as budgetary constraints tighten, it remains questionable whether selling unique strategic assets, under strict secrecy and without transparency, is the right solution.
Concerns over U.S. arms sales to Saudi Arabia are not limited to Israel. Trump’s push to sign defense agreements totaling nearly $1 trillion with Riyadh has reportedly met resistance within the U.S. Department of Defense, amid fears that sensitive F-35 technologies could leak to China, given Saudi Arabia’s close military ties with Beijing.
In pursuing the F-35 sale, Trump appears to be disregarding multiple warning signs, including the principle enshrined in US law requiring the preservation of Israel’s qualitative military advantage. This is occurring at a time when there is no clear indication that Israel will receive compensatory capabilities to ensure its continued military dominance, even absent normalization with Saudi Arabia.
Meanwhile, Crown Prince Mohammed bin Salman has conditioned normalization with Israel on tangible steps toward establishing a Palestinian state. At the same time, Turkish President Recep Tayyip Erdogan, amid warming ties with Trump, is seeking to revive Ankara’s bid to rejoin the F-35 program, a move that could further erode Israel’s military edge.
Turkey was expelled from the F-35 consortium in 2019 following its acquisition of Russia’s S-400 air defense system. Today, however, Turkey’s growing regional clout, its involvement in Gaza’s reconstruction, and the renewed political dialogue with Washington have placed the issue back on the table.
