Israel and Germany signed a contract a few weeks ago finalizing the sale of a sixth Dolphin-class submarine to the Israel Navy, The Jerusalem Post has learned.The Defense Ministry initiated talks with Germany last year about buying a sixth submarine but Chancellor Angela Merkel’s government initially balked when Israel asked that it underwrite part of the cost. In late November, though, Germany announced that it had approved the deal and that it would pay for part of the vessel.Christian Schmidt, secretary of state for defense, told the Post that the contract was signed a few weeks ago and that Germany had agreed to subsidize its cost. Calling Israel a “preferred customer,” Schmidt said the sale of the submarine was a demonstration of his country’s commitment to Israel’s security. “The security of the State of Israel is a German concern and this will not change,” he said during a visit to Israel during which he met with Israeli diplomatic and defense officials and attended the Herzliya Conference.Schmidt dismissed media reports that claimed Merkel had considered canceling the deal in response to Israeli construction in Jerusalem’s Gilo neighborhood, over the Green Line.“We are good friends and sometimes we need to talk about things that we do not think should be done regarding the settlement policy,” Schmidt said. “We do not see this as a linkage [to the submarine issue] but as a part of friendly talks.”Israel already has three Dolphin-class submarines and two are currently under construction in Germany with delivery expected later this year. According to foreign reports, Israel’s submarines have a second-strike capability and carry cruise missiles armed with nuclear warheads. Germany donated the first two submarines after the First Gulf War and split the cost of the third with Israel. The three submarines currently in the navy's possession employ a diesel-electric propulsion system, which requires them to resurface frequently to recharge their batteries.The submarines under construction will be fitted with a new propulsion system combining a conventional diesel lead-acid battery system and an air-independent propulsion system used for slow, silent cruising, with fuel cells for oxygen and hydrogen storage.Schmidt said that Germany was looking to increase its defense cooperation with Israel and was specifically interested in learning from the IDF about training and military doctrine.He said that Germany was also considering buying the Heron TP long-range unmanned aerial vehicle later this decade to replace the Heron 1 it is operating in Afghanistan. Both UAVs are manufactured by Israel Aerospace Industries.