Israel salvages $1 billion Apache deal after missing U.S. deadline
The Ministry of Defense and the Pentagon signed an agreement for 12 attack helicopters after a budget dispute threatened to derail the purchase. The government approved NIS 1 billion for the deal amid broader planned budget cuts.
The Israeli Ministry of Defense and the U.S. Pentagon signed an agreement on Wednesday to purchase 12 Boeing-manufactured AH-64E Apache attack helicopters in a deal valued at approximately $1 billion. The signing comes just six days after Israel missed the deadline to place the order, following a budget dispute between the Ministry of Finance and the Ministry of Defense and three extensions granted by the U.S. administration.
Ministry of Defense Director-General Maj. Gen. (Res.) Amir Baram instructed the ministry’s delegation in the United States to sign the agreement following government approval on Wednesday and the formulation of a new budgetary framework through joint efforts by the Ministry of Defense and the U.S. administration. According to a Ministry of Defense statement, the helicopters are scheduled for delivery to Israel early next decade. The deal was adjusted to accommodate the country’s budgetary constraints.
The signing resolves, at least for now, a crisis that had intensified in recent days between the Ministry of Finance and the Ministry of Defense. As Calcalist reported last week, the purchase of the 12 helicopters had been taken off the table after the parties failed to identify a funding source for $288 million of the deal’s estimated $1 billion cost. This came despite three extensions granted by the Pentagon over the past year to give Israel time to finalize its budgetary arrangements and place the order with Boeing.
The collapse of the deal triggered a bitter dispute between the two ministries, with each blaming the other for the impasse. Defense officials argued that the budget disagreements threatened the IDF’s force-building plans, while the Finance Ministry maintained that the Ministry of Defense had changed the agreed-upon funding framework in a way that exceeded statutory budget limits.
A solution began to take shape in recent days. On Wednesday, the government approved the transfer of NIS 1 billion to the defense budget, funded by cuts to the five-year plan for Arab society for 2027-2029. The measure was presented to ministers as an urgent defense procurement requirement that could not be postponed, with the aim of salvaging the Apache deal.
At the same time, the government is advancing a plan for an additional across-the-board cut of NIS 2.5 billion to ministry budgets. Combined with the NIS 1 billion cut to the Arab society plan, the measures would bring total planned budget reductions to NIS 3.5 billion.
