Analysis: Israeli defense industries could suffer from missile defense budget uncertainty

The budget argument could also have some effect on US defense companies who are involved in the production of some components of Israel's interceptors.

June 15, 2016 21:00
1 minute read.

Rafael Advanced Defense Systems’ C-Dome system, a sea-based version of the Iron Dome anti-rocket battery, fires from an Israeli Navy missile ship. (photo credit: screenshot)


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The announcement by the White House on Tuesday that it opposes a congressional request to provide Jerusalem with $600 million next year for rocket and missile defense systems has executives in Israeli defense companies concerned.

With Israel planning to push ahead with the production and further development of air defense systems, budget uncertainty is the last thing the firms want to deal with in the coming two years.

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The budget dispute could affect US defense companies that are involved in the production of components for Israel’s interceptors.

The Haifa-based Rafael Advanced Defense Systems’ Iron Dome batteries are undergoing a transformation, which has seen them increase their range, detection and interception capabilities. Rafael and US co-producer Raytheon are mass-producing Tamir interceptors for the system.

Iron Dome has shot down some 1,500 Gazan rockets so far, and will go into action in any future conflict with Hamas.

Meanwhile, Rafael’s David’s Sling system, which can shoot down enemy missiles far away from Israel’s borders, is going online and fast becoming a key element of the nation’s air defenses.

Raytheon is a co-producer of this system, too.

Israel Aerospace Industry’s Arrow-3, designed to destroy ballistic missiles in space, will also soon officially go online after it successfully destroyed a mock target above the atmosphere.

Boeing is producing a significant portion of components for this system.

Next week, Defense Minister Avigdor Liberman will travel to the US on his first working visit. He will meet with US Secretary of Defense Ash Carter.

During their talks, the issue of missile defense assistance will inevitably come up, within the context of Israel’s attempt to reach an agreement with the Obama administration over the next decade’s defense assistance package.

The White House holds many bargaining chips in these talks, and could try to extract concessions from Israel before agreeing to the next Memorandum of Understanding. The outcome of the negotiations will have important consequences for Israel’s ability to further develop systems to defend the home front from enemy rockets and missiles.

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