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Israel inks largest defense deal in its history

The German Air Force is to take delivery of Israel's Arrow 3 missile-defense system by the fourth quarter of 2025.

An Arrow-3 missile interceptor. Credit: Israeli Ministry of Defense Spokesperson’s Office.
An Arrow-3 missile interceptor. Credit: Israeli Ministry of Defense Spokesperson’s Office.

Israeli Defense Minister Yoav Gallant on Thursday signed an agreement in Berlin to provide Israel’s Arrow 3 missile-defense system to Germany. At an estimated value of $3.5 billion, the deal is the largest of its kind in Israel’s history.

The first missile battery, including radar, launch and interception management systems, is to be supplied to the Germans by Israel Aerospace Industries (IAI) by the fourth quarter of 2025.

Germany is the first foreign purchaser of the system.

Arrow 3 is the upper-tier layer of Israel’s missile-defense program, designed to intercept ballistic missiles during the exoatmospheric portion of their trajectory, at altitudes above 100 kilometers (62 miles). It became operational in Israel on Jan. 18, 2017.

In June, German lawmakers approved advanced payments of up to €560 million ($606 million) for the system.

The primary contractor for the integration and development of the system is IAI, working with additional Israeli and American defense firms.

German Chancellor Olaf Scholz made an initial request for the system in a meeting with then-Prime Minister Naftali Bennett in March 2022, with Israel working behind the scenes to persuade Washington to allow the sale.

The system—among the most advanced of its kind—was jointly developed by the Israeli Missile Defense Organization and the U.S. Missile Defense Agency, and therefore required American approval to sell to a third party.

The U.S. gave the green light on Aug. 17.

The European Leadership Network (ELNET), an NGO working to strengthen ties between Israel and European countries, said on Thursday that it welcomed the historic signing of the purchase agreement, which it said “brings Europe closer to Israel in the fight against similar challenges and the protection of citizens.”

ELNET was a “direct partner” in the effort, organizing a visit by a delegation of representatives of the Bundestag’s defense committee in the winter of 2022 who “were impressed for the first time by the Arrow 3 system,” according to the group.

In August, Germany’s ambassador to Israel, Steffen Seibert, told JNS that Arrow 3 “will add a very substantial element to our military relationship. It will also make it more of a two-way street, a development that began already with the German use of Israeli drone systems to protect our soldiers in foreign missions.”

Seibert said while the system will first and foremost protect Germany, ultimately the idea is “to integrate the system into European air defense, so Arrow 3 will also protect neighboring European countries.”

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