Israel and the US are negotiating a new multiyear military aid agreement, Israeli newspaper Yedioth Ahronoth reported Monday.
According to the daily, Israel is seeking to finalize the agreement before the new US Congress is sworn in, amid concerns that political obstacles could affect the continuation of aid.
The Democratic Party won control of Congress from US President Donald Trump's Republican Party in the Nov. 3 midterm elections.
Yedioth Ahronoth said US military aid to Israel "will not end immediately," contrary to previous remarks by Trump.
Direct military aid is expected to be reduced by nearly half through shortening the usual 10-year framework to five years after the current agreement expires in 2028, the paper said.
Direct US military assistance will then end altogether after the five-year period, it added.
At the same time, Washington is expected to increase funding for the joint development of air and missile defense systems from the current level of $500 million annually to an undisclosed sum, according to the report.
Successive US administrations have provided Israel with extensive military, financial and political support.
Washington has also remained a key military and diplomatic supporter of Israel during its genocide on Gaza since October 2023.
According to Yedioth Ahronoth, negotiations are being conducted by teams from both countries, with representatives of US Secretary of State Marco Rubio participating on the American side and officials from Israel's Defense Ministry and its embassy in Washington representing Israel.
Israeli negotiating teams were stunned by Trump's announcement that US military assistance to Israel will end by the close of 2026 and were initially unsure what he meant, the newspaper said.
It quoted an unnamed senior Israeli official as saying Trump made the statement largely for domestic political reasons, in an effort to help Republican Senate candidate Mike Rogers in Michigan against Democrat Abdul El-Sayed, a sharp critic of Israel.
The effort failed, with El-Sayed defeating Rogers to become the first Muslim elected to the US Senate.
Trump told Fox News on US Election Day: "We were giving them $4 billion. We are, but it gets cut off at the end of the year."
He also said Israeli Prime Minister Benjamin Netanyahu had raised the idea of ending US aid, arguing that Israel had become a successful country that no longer needed the assistance.
Yedioth Ahronoth said the emerging arrangement does not provide for an immediate end to aid but rather a gradual phaseout over five years after the current agreement expires in 2028.
Under the existing framework, Israel receives $3.3 billion annually through the US Foreign Military Financing program over 10 years, totaling $33 billion.
The proposed agreement is expected to maintain a similar annual level of direct aid but for only five years, totaling around $16.5 billion, before direct military aid ends completely, according to the paper.
The current agreement will remain in force through 2028.
The newspaper said the aid is used to purchase US-made weapons, military equipment, fighter jets, helicopters and ammunition from American defense companies.
Israel was previously permitted to convert part of the assistance into Israeli shekels to purchase equipment from domestic arms manufacturers, but that provision has been gradually phased out.
An additional $500 million annually is allocated for joint missile-defense cooperation, including research, development and production of active defense systems such as Iron Dome, David's Sling and Arrow.
Yedioth Ahronoth said that funding is expected to increase under the prospective agreement as the threat from drones and missiles grows, requiring expanded joint research and development.
Officials cited by the newspaper said deeper cooperation in this field would benefit both countries.
An unnamed senior Israeli official familiar with the negotiations told the daily that some members of Congress oppose reducing military assistance to Israel for economic reasons.
The official said much of the funding is ultimately spent in the US states represented by those lawmakers, supporting American defense companies and jobs.
After Netanyahu announced his desire to end US military assistance, senators contacted Israeli officials to ask whether Israel understood the consequences of such a move, according to the report.
"We are moving here from a model of aid to a model of partnership," the Israeli official said.
"It is important to remember that most of the security assistance remains in America and contributes to the American economy. Cutting it would also hurt American industries and require adjustments," he added.
On Sunday, Trump acknowledged in a television interview that a "great dislike" among Americans was among the factors behind his party's losses in the congressional elections.
US opinion polls since the start of the Gaza genocide have shown a notable decline in favorable views of Israel among Americans alongside growing sympathy for Palestinians.
More than 74,000 Palestinians have been killed and over 175,000 injured in Gaza since October 2023, most of them women and children, while around 90% of the enclave's infrastructure has been damaged or destroyed, according to Palestinian authorities.
