JERUSALEM: The United States is to hike its defence aid package to Israel for the coming ten years to $30 billion, compared to $24 billion for the last decade, a media report said.
The two countries are to sign on a new Memorandum of Understanding on the US defense package for the Jewish state today, Ha'aretz Online reported.
Israel is slated to receive the first pay out of $2.550 billion in October 2008, with the package growing by $150 million each year reaching a grant of $3.1 billion in 2011, the report said.
The agreement also permits Israel to convert into Shekels 26.3 per cent of the aid money, thereby enabling it to procure defense equipments from Israeli companies. The rest of the aid must be used to purchase equipments from the US military industries.
Israeli negotiators are said to have tried to step up the percentage of aid that could be used for procurement from local companies without success.
Prime Minister Ehud Olmert on Wednesday met with visiting US Under Secretary of State for Political Affairs, Nicholas Burns, in preparation for Thursday's signing.
Olmert asked Burns to thank US President George W Bush and Secretary of State Condoleezza Rice for their efforts in transforming the understandings with him, reached during his last visit to Washington, into a binding agreement.
"The aid agreement with the US is an important and significant component for Israel, and proves once again the depth of the relationship between the two countries and the United States' commitment to Israel's security, and to preserving its qualitative advantage over other countries in the Middle East," the Israeli Prime Minister said.
Burns is scheduled to meet today with Bank of Israel Governor, Stanley Fischer, who headed the Israeli team in negotiations with the Washington.
The aid agreement will be signed today between the American Secretary of State and Israel's Foreign Ministry Director General, Aharon Abramovich.
Burns will also be meeting Foreign Minister Tsipi Livni.
The US official on Wednesday also met Transportation Minister, Shaul Mofaz, who oversees the strategic dialogue with the Washington.
Mofaz and Burns agreed to hold a strategic dialogue in mid-October on Iran and Lebanon.
