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Israeli Prime Minister Benjamin Netanyahu, right, and then-U.S. Ambassador to Israel David Friedman watch a video which shows the launch of the Arrow 3 hypersonic anti-ballistic missile during a cabinet meeting in Jerusalem in 2019.Menahem Kahana/The Associated Press

Israel’s Defence Ministry said Thursday it has secured its largest-ever defence deal selling a sophisticated missile defence system to Germany for $3.5 billion after the United States approved the deal.

Although Israel has long had close economic and military links with western European countries, the deal with Germany could draw the attention of Russia. Israel has maintained working relations with Russia throughout the war in Ukraine and has repeatedly rebuffed requests to sell arms to Kyiv for fear of antagonizing Moscow.

Germany will buy the advanced defence system, coined Arrow 3, which is designed to intercept long-range ballistic missiles. Israel sought approval for the deal from the U.S. State Department because the system was jointly developed by the two countries.

“The American approval marks a momentous milestone in the strategic relationship between Israel and the United States,” Israeli defence official Daniel Gold said in a statement. “The joint program with the U.S. on the advanced Arrow 3 defence system strengthens our national defence,” adding it will extend Germany’s defence capability.

The sale still requires additional procedural steps by both Israel and Germany, including approval by both parliaments, according to the director of the Israeli Missile Defense Organization, Moshe Patel. Patel told reporters Thursday that the components of the missile system will be fully delivered to Germany by 2025, with the system reaching full capability by 2030.

Germany launched the European Sky Shield Initiative last year with 17 other nations, including the United Kingdom and Sweden, a joint European air defence system after the Russian invasion of Ukraine.

German Defense Minister Boris Pistorius welcomed the U.S. approval allowing the deal to move forward.

“This procurement plan is essential for us in order to be able to protect Germany from ballistic missile attacks in the future,” he said in a statement posted by his ministry on the social platform X, formerly known as Twitter. He added that “the project also constitutes a signal of our special German-Israeli relations.”

Uzi Rubin, the former director of Israel’s missile defence program, said Arrow 3 could be moved to act as a long-range ballistic missile shield for other European countries. He said it was the best defence available against the threat of ballistic missiles but does not protect against cruise missiles or others flying at lower altitudes.

While Israel has turned down requests to provide Ukraine with weapons, it has sent humanitarian aid.

Israel has a delicate relationship with Russia, with which it co-ordinates on security issues in neighbouring Syria. Israel has carried out hundreds of air strikes against Iranian military positions in recent years ibn Syria. Russia is also home to a large Jewish community.

By moving ahead on Arrow 3 with Germany, Israel appears to be counting on the fact that the deal, as well as a sale of a different missile defence system to NATO member Finland, involves only defensive weapons – and will not fundamentally disrupt cordial relations with Russia.

“Relations are a bit strained,” said Rubin, who is also an expert at the Jerusalem Institute for Strategy and Security, a think tank. “But still, we are not supplying Ukraine with any weapons. We do that because we want to keep relations with Russia at an acceptable level.”

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