Germany has decided to purchase Israel’s Arrow 3 air-defense system rather than a competing Lockheed Martin Corp. device, people with knowledge of the situation told Bloomberg.

Chancellor Olaf Scholz met with Israeli Prime Minister Yair Lapid in Berlin earlier on Monday, and both gave encouraging signs about a possible deal at a joint news conference.

According to German media, the Arrow 3 interceptor—made by Israel Aerospace Industries—could cost around 2 billion euros ($2 billion) if the government chooses it.

The Prime Minister’s Office said the two men held a private meeting that lasted about an hour.

During the meeting, Lapid emphasized the importance of continuing the struggle against Iran’s nuclear program and expanding strategic cooperation with Germany.

In January, Israel signed a 3 billion euro ($3.4 billion) agreement with Germany’s ThyssenKrupp Marine Systems to develop and produce three submarines for the Israeli Navy.


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