The United States of America and Israel on Tuesday reportedly reached a record $38 billion dollar (£28 bn) military aid deal. The 10-year pact is the largest military aid given by US to any country and both the parties are expected to sign the deal on Wednesday, 14 September.

The US State Department said in a statement that the pact "constitutes the single largest pledge of bilateral military assistance in US history." The deal will increase the aid given by US to Israel from the current $3.1bn a year to $3.8bn a year and replace a previous 10-year package that will expire in 2018. The new pact will last from 2019 to 2028. Among other things, Israel will be given $500m a year for missile defence programmes.

According to Reuters, the process also involves big concessions granted by Benjamin Netanyahu, which includes Israel's agreement to not seek additional funding from US Congress beyond what is guaranteed in the new pact.

The new package comes despite differences between the Obama administration and the Israeli government regarding the Middle East peace process issue and settlement building in the Occupied Palestinian Territories. Around 10 months of long drawn out aid negotiations between the two countries have highlighted the friction between Obama and Netanyahu mainly over the US nuclear deal with Iran that was signed last year.

In March 2015, tensions between the two leaders reached a peak, when Netanyahu spoke to the US Congress to lobby against the Iran deal. Obama viewed this appearance as an unprecedented interference in the matters of the country by a foreign leader.

Last month, US also used tough language to denounce what it says the "dramatic acceleration" in Israeli settlement building in East Jerusalem and West Bank. It was previously reported that Netanyahu has asked for as much as $5 bn (£3.7bn)per year in military aid but he later decided that it would be best for him make a new deal with the Obama administration, who will leave office in January. Israel depends heavily on the US military aid and its total defense budget is around $16bn, not including the US aid.

Obama Netanyahu US Israel
US President Barack Obama shakes hands with Israeli Prime Minister Benjamin Netanyahu in the Oval Office of the White House in Washington [File Photo] Reuters