U.S. Military Aid and the Israel/Palestine Conflict

The U.S. provides Israel nearly $10.5 million* in military aid per day,
while it gives the Palestinians $0** in military aid.

“Since the October War in 1973, Washington has provided Israel with a level of support dwarfing the amounts provided to any other state. It has been the largest annual recipient of direct U.S. economic and military assistance since 1976 and the largest total recipient since World War ll. Total direct U.S. aid to Israel amounts to well over $140 billion in 2003 dollars. Israel receives over $3 billion in direct foreign assistance each year, which is roughly one-fifth of America's entire foreign aid budget. In per capita terms, the United States gives each Israeli a direct subsidy worth about $500 per year. This largesse is especially striking when one realizes that Israel is now a wealthy industrial state with a per capita income roughly equal to South Korea or Spain.”

- John J. Mearsheimer and Stephen M. Walt
"The Israel Lobby and U.S. Foreign Policy"

*Source: The Congressional Research Service's report "U.S. Foreign Aid to Israel," written by Jeremy M. Sharp, Specialist in Middle Eastern Affairs, updated November 16, 2020.

According to the report, the United States gave Israel $3.3 billion for Fiscal Year 2020 in direct bilateral military aid (also referred to as Foreign Military Financing or FMF). Congress also authorized $500 million for "joint" U.S.-Israel missile defense programs (designed to protect Israeli territory from potential outside threats), bringing total military aid to Israel to $3.8 billion per year.

Put another way, American taxpayers give Israel nearly $10.5 million per day.

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Over the last 20 years, the U.S. has slowly phased out economic aid to Israel and gradually replacing it with increased military aid. In September 2016, the United States and Israeli governments signed a new ten-year Memorandum of Understanding (MOU) where the U.S. pledged to give Israel $38 billion in military aid ($33 billion in FMF grants plus $5 billion in missile defense) over the course of 10 years (FY2019 to FY2028). This new MOU replaces the $30 billion 10-year agreement signed by the Bush Administration that expired in 2018.

Israel receives 59% of total U.S. foreign military aid

Israel is by far the largest recipient of U.S. foreign military aid. According to the CRS report, the President's request for Israel for FY 2021 will encompass approximately 59% of total U.S. foreign military financing worldwide. The report continues, " Annual FMF grants to Israel represent approximately 20% of the overall Israeli defense budget. Israel’s defense expenditure as a percentage of its Gross Domestic Product (5.3% in 2019) is one of the highest percentages in the world."

(Like many government policies, this disbursement of U.S. tax money is not because it serves American interests, but instead is the result of special interest lobbying.)

Contrary to ordinary U.S. policy, Israel has been and continues to be allowed to use approximately 26.3% of U.S. military aid to purchase equipment from Israeli manufacturers. According to CRS, “no other recipient of U.S. military assistance has been granted this benefit.”

Thanks in part to this indirect U.S. subsidy, Israel’s arms industry has become one of the strongest in the world. Between 2001 and 2008, Israel was the 7th largest arms supplier to the world, selling $9.9 billion worth of equipment. And it continues to grow stronger. In 2019, Israel sold $7.2 billion in military goods to other countries.

The former assistant Secretary of Defense from 2007 to 2009 asked, "How inexplicable is it that we are competing against the Israelis in the Indian defense procurement market at the same time we are subsidizing the Israeli defense industry?"

A U.S. government source estimates that Israel is using approximately $1.2 billion each year (38.7% of the aid it receives from the U.S.) to "directly support its domestic budget rather than to build on its arsenal of advanced US equipment."

The United States also contributes funds for a joint U.S.-Israeli Missile Defense Program designed to thwart short-range missiles and rockets fired by non-state actors (such as Hamas and Hezbollah) as well as mid- and longer-range ballistic missiles (this refers to Iran and/or Syria's arsenals). Arrow II, Arrow III, David's Sling, and Iron Dome refer to different projects under the umbrella of this Missile Defense program. For FY2021, Congress authorized $500 million for the second year of the Memorandum of Understanding (MOU) (this passed in the House on July 31, 2020).

By all accounts the United States has given more money to Israel than to any other country. The Congressional Research Service’s conservative estimate of total cumulative US aid to Israel from 1949 through 2020 is $146 billion (not adjusted for inflation).

The United States has granted more total aid to Israel since World War II than to any other country.

Cumulative US foreign assistance obligations between 1946 and 2019 to the top ten recipients. Inflation-adjusted to 2019 dollars. (source)

In a Washington Report article published in October 2013, Shirl McArthur writes, “[T]he indirect or consequential costs to the American taxpayer as a result of Washington’s blind support for Israel exceed by many times the amount of direct U.S. aid to Israel. Some of these ‘indirect or consequential’ costs would include the costs to U.S. manufacturers of the Arab boycott, the costs to U.S. companies and consumers of the Arab oil embargo and consequent soaring oil prices as a result of U.S. support for Israel in the 1973 war, and the costs of U.S. unilateral economic sanctions on Iran, Iraq, Libya and Syria. (For a discussion of these larger costs, see ‘The Costs to American Taxpayers of the Israeli-Palestinian Conflict: $3 Trillion,’ by the late Thomas R. Stauffer, June 2003 Washington Report, p. 20.)”

**Source: The Congressional Research Service's Report “U.S. Foreign Aid to the Palestinians”, written by Jim Zanotti, Analyst in Middle Eastern Affairs, dated May 18, 2018. (See also, U.S. Resumption of Foreign Aid to the Palestinians, April 14, 2021.)

The U.S. government has never provided Palestinians with military aid. "The Department of Defense Appropriations Act, 2015 (H.R. 4870), which passed the House in June 2014, contained provisions that would prohibit funds made available by the act from being obligated to the PA (§10033) or from being used to transfer weapons to the PA (§10024)."

Aid to Palestinians is largely designated for the policing of their own people as well as for humanitarian and development needs. Such funds are only authorized once Congress has received proof that they will be used for "non-lethal assistance." The U.S. State Department sought $215 million in economic assistance and $35 million for non-lethal security for the Palestinians for FY 2019, down from previous annual averages of $400 million and $100 million for economic and non-lethal security assistance, respectively.

(For expenditures on behalf of Israel, go here.)

The U.S. Agency for International Development (USAID) has provided the Palestinian people with some indirect economic assistance through funds distributed to U.S.-based NGOs operating in the West Bank and Gaza. According to the CRS report, "Funds are allocated in this program for projects in sectors such as humanitarian assistance, economic development, democratic reform, improving water access and other infrastructure, health care, education, and vocational training." The program is subject to a vetting process and to yearly audits...

Since its creation in 1949, the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) has received financial backing from each presidential administration, whether Democrat or Republican. The UNRWA “provides food, shelter, medical care, and education for many of the original refugees from the 1947-1949 Arab-Israeli war and their families—now comprising approximately 5 million Palestinians in Jordan, Syria, Lebanon, the West Bank, and Gaza." (Learn more about Palestinian refugees.)

Though the United States’ yearly allocation to the UNRWA typically amounted to less than one tenth of its military aid to Israel each year, the funds nonetheless made up nearly a third of the agency’s annual budget. However, in August of 2018, the Trump administration’s State Department issued a press release announcing an indefinite cessation of all UNRWA funding from the United States effective immediately, a decision described by the UN Commissioner-General as the agency’s “greatest financial crisis in its history.”

Regarding U.S. aid to the Palestinian Authority, many Palestinian experts assert that the support actually helps Israel maintain its illegal occupation of Palestinian land. "Security collaboration" between the PA and Israel means that Palestinian police are being outsourced to monitor and respond to Palestinians resisting the Israeli occupation or protesting against Israel's assaults on Gaza.

Additionally, "about $50 million in US assistance to the Palestinians does not flow directly to the PA but instead to Israel, which uses the money in part to pay off Palestinian debts to Israeli service providers such as electricity companies."

U.S. aid to the PA also makes it easier and cheaper for Israel to spend its own US aid on security for its Jewish-only settlements built on confiscated Palestinian land, which is illegal under international law. Recent research has shown that at least 78% of international aid money to the West Bank and Gaza ends up in Israel's economy.

Last updated: 1/28/2021