The Defense Ministry released a rare statement on Friday denying media reports that talks were being held with Germany regarding the potential sale of a new submarine.The statement clarified that since Israel was not in talks with Germany regarding the procurement of a sixth submarine, there were, as a result, no talks regarding an Israeli request to receive German government financial assistance for the deal.RELATED:'Israeli subs with nukes in Gulf'First German-Israeli cabinet set to meetIsrael and Germany were widely believed to have held talks over the past year regarding the possibility that Berlin will pay for a percentage of the cost of a new submarine – a sixth for Israel – and two new Meko-class missile ships.The Defense Ministry statement came amid reports that Chancellor Angela Merkel’s government had decided to turn down an Israeli request for financial assistance in purchasing the Dolphin-class submarine and new missile ships.In another rare statement, the German government, which rarely talks about defense sales, also denied it was holding talks with Israel on subsidizing new naval vessels."There are no negotiations between Israel and Germany about submarines," government spokesman Ulrich Wilhelm was quoted as saying by Reuters.Israel currently has an operational fleet of three submarines, which were heavily underwritten by the German government. Another two are currently under construction at the Keil Shipyard in Germany which were also subsidized by Berlin and are expected to be delivered to Israel in 2012. Israel had hoped to receive additional subsidies for two Meko-class ships it was interested in purchasing. The Israeli Navy will now have to go back to the drawing board if it wants to move ahead with plans to purchase new missile ships. One option is to again review the Littoral Combat Ship (LCS), under development in the United States or to try a domestic option and have Israel Shipyards Ltd. construct the new ships.