The Evolving Dynamics of U.S.-Israel Relations: Strategic Calculations, Financial Commitments, and Future Uncertainties

Introduction

The United States’ alliance with Israel remains one of the most consequential geopolitical coalitions of the post-World War II era, shaped by historical commitments, strategic interests, and domestic political dynamics.

However, the relationship faces unprecedented challenges as Prime Minister Benjamin Netanyahu navigates shifting priorities in Washington, mounting economic pressures on U.S. military aid, and growing international scrutiny over Israel’s military campaigns.

Since its founding in 1948, Israel has received over $317.9 billion in inflation-adjusted U.S. foreign aid, with $17.9 billion allocated solely for military operations in Gaza since October 2023—the highest annual total in history.

FAF examines the structural factors compelling U.S. support, the economic and political constraints reshaping Washington’s posture, and the implications for Netanyahu’s ability to secure unconditional backing amid escalating regional conflicts.

Historical Foundations of U.S.-Israel Relations

Strategic Alignment During the Cold War

The U.S.-Israel partnership originated in the early Cold War, as President Harry Truman’s 1948 recognition of Israel served dual purposes: advancing humanitarian goals for Jewish refugees and establishing a pro-Western foothold in the Middle East.

Influenced by personal connections and geopolitical calculus, Truman's decision set a precedent for bipartisan support.

By 1967, following Israel’s victory in the Six-Day War, U.S. military aid surged, reflecting Israel’s role as a bulwark against Soviet-aligned Arab states.

The 1973 Yom Kippur War further cemented this alliance, with the U.S. airlifting $2.2 billion in emergency military supplies to ensure Israel’s survival.

Institutionalizing Military Cooperation

The 2016 Memorandum of Understanding (MOU) under President Obama codified a decade-long $38 billion military aid package, ensuring Israel’s qualitative military edge (QME) in the region.

This agreement prioritized advanced systems like the Iron Dome, developed with $1.5 billion in U.S. funding, and F-35 fighter jets.

By 2023, annual U.S. military aid reached $3.8 billion, constituting 16% of Israel’s defense budget.

Such investments aligned with U.S. strategic objectives, including countering Iranian influence and maintaining regional stability through Arab-Israeli normalization efforts.

Factors Compelling U.S. Support for Israel

Geopolitical and Military Interdependence

U.S. policymakers have long viewed Israel as a “force multiplier” for American interests in the Middle East.

Joint military exercises, intelligence-sharing agreements, and co-development of missile defense systems underscore this interdependence.

For instance, the USS Gerald R. Ford carrier group’s deployment to the eastern Mediterranean in October 2023 demonstrated immediate U.S. operational support during the Gaza war.

Similarly, the Biden administration’s emergency arms transfers—including 15,000 bombs and 57,000 artillery shells in December 2023—highlight Israel’s reliance on U.S. arsenals for sustained campaigns.

Domestic Political Dynamics

Pro-Israel lobbying groups like AIPAC and evangelical Christian constituencies exert significant influence over U.S. foreign policy.

Evangelicals, constituting 25–30% of the U.S. electorate, view support for Israel as a theological imperative, while bipartisan congressional consensus frames aid as a moral obligation.

This dynamic insulated Israel from criticism until recent years, when progressive Democrats began challenging unconditional aid over human rights concerns.

Nevertheless, the October 2023 Hamas attacks temporarily reinforced bipartisan solidarity, with the House approving a $14.5 billion Israel aid package in November 2023.

Economic Ties and the Military-Industrial Complex

U.S. defense contractors benefit substantially from weapons sales to Israel. Lockheed Martin and Raytheon supply 85% of Israel’s missile interceptors and 70% of its combat aircraft, creating a vested interest in maintaining aid flows.

The Biden administration’s use of emergency authorities to bypass congressional review for $106.5 million in tank shell sales in December 2023 exemplifies this symbiosis.

Brown University’s Costs of War project estimates that U.S. military aid to Israel sustains over 50,000 American jobs annually.

Netanyahu’s Diminishing Leverage in Washington

Strained Personal Relationships with U.S. Leadership

Netanyahu’s March 2025 visit to Washington—his first meeting with President Trump since the latter’s reelection—revealed lingering tensions.

Despite public displays of camaraderie, Trump reportedly resented Netanyahu’s 2020 congratulatory call to President Biden and perceived disloyalty during the 2020 election fraud claims.

While Trump announced a $1 billion military aid package, he declined to endorse Netanyahu’s demands for renewed offensive operations in Gaza, reflecting a transactional approach to the alliance.

Shifting U.S. Priorities and Economic Constraints

The U.S. faces competing fiscal pressures, including a $34 trillion national debt and rising healthcare costs.

Military aid to Israel now consumes 4.8% of total U.S. foreign assistance, second only to Ukraine.

With 52% of Americans supporting arms embargoes on Israel in March 2024 polls, sustained funding risks alienating voters ahead of the 2026 midterms.

The Biden administration’s $105 billion global security supplemental request—stalled in Congress—illustrates the difficulty of reconciling international commitments with domestic austerity.

The Gaza War’s Financial and Humanitarian Toll

Israel’s Gaza campaign has cost the U.S. $22.76 billion as of October 2024, including $4.86 billion for counter-Houthi operations in Yemen.

Over 42,000 Palestinian deaths—52% women and children—have intensified scrutiny of U.S. complicity, with the Wall Street Journal linking 2,000-pound U.S.-made bombs to mass casualty events.

Late Secretary Blinken’s admission of a “gap” between U.S. appeals for civilian protection and on-the-ground realities underscores diminishing returns on unconditional support.

The Path Ahead: Recalibration or Rupture?

Netanyahu’s Imperative to Lower Expectations

Netanyahu confronts a transformed Washington landscape

Transactional Over Ideology

Trump’s demand for “America First” concessions—such as backing Saudi normalization demands for Palestinian statehood—signals reduced tolerance for unilateral Israeli actions.

Coalition Fragility

With far-right parties threatening to collapse his government over ceasefire extensions, Netanyahu cannot rely on U.S. political cover indefinitely.

Legal Exposure

Ongoing corruption trials and potential International Criminal Court (ICC) warrants related to Gaza operations increase dependency on U.S. diplomatic protection.

Compelling Factors for Continued U.S. Support

Despite strains, structural drivers persist:

Deterring Iran

Joint U.S.-Israel military exercises in the Negev Desert (February 2025) and shared intelligence on Iranian nuclear advances maintain strategic alignment.

Arab Normalization

The Abraham Accords’ expansion to Saudi Arabia remains contingent on U.S. security guarantees for Israel.

Tech Collaboration

Israeli cybersecurity firms account for 20% of global venture investments, with U.S. tech giants like Google and Microsoft relying on Israeli R&D.

The Economic Crossroads

The U.S. cannot indefinitely sustain current aid levels without reforms:

Debt Servicing Costs

At 3.2% of GDP, interest payments on U.S. debt now exceed defense spending, pressuring lawmakers to trim foreign aid.

Opportunity Costs

Annual aid to Israel equals 80% of the National Institutes of Health (NIH) budget, fueling debates over domestic priorities.

Conditionality Momentum

Over 120 Democratic lawmakers now endorse bills tying aid to human rights benchmarks, mirroring restrictions on Saudi Arabia.

Conclusion

Prime Minister Netanyahu must recalibrate expectations from Washington, recognizing that blank-check support is untenable amid U.S. fiscal constraints and evolving public opinion.

While shared threats from Iran and institutionalized military ties will preserve the alliance’s core, future aid will likely face increased scrutiny, reporting requirements, and thematic limitations—particularly regarding settlement expansion and civilian harm mitigation.

For the U.S., recalibrating the partnership to include pressure for diplomatic progress on Palestinian statehood could prevent further erosion of its moral standing and strategic flexibility.

As former Ambassador Daniel Kurtzer warns, “The era of cost-free support is over; both nations must adapt to a multipolar Middle East where soft power matters as much as arms shipments.”