Thursday’s dramatic announcement by the Israeli Defense Ministry that the United States gave the green light for the sale of Israeli’s Arrow 3 air defense system to Germany—the largest defense export deal in the Jewish state’s history—carries powerful historical messages.
Boaz Levy, president and CEO of Israel Aerospace Industries, the prime contractor of the Arrow 3 system, said during a telephone press briefing, “One final sentence as a person who has led this project for so many years and as someone whose mother survived the Holocaust, this is a very important moment for me. I believe that the fact that Israelis developed a system that can protect a population from all over the world from ballistic missiles is a very important milestone. For me personally, for IAI and for Israel in general.”
Arrow 3 is designed to intercept ballistic missiles in space, and it will in the coming years protect the whole of Germany from the threat of Russian missile attacks.
The Israeli Defense Ministry, German Federal Ministry of Defense and Israel Aerospace Industries will sign the landmark $3.5 billion defense agreement in the coming weeks, and in 2025, the system will enter into initial operational status before becoming fully operational in 2030.
IAI teams will train the German Air Force on the technical aspects of operating the system. Israel Air Force representatives will also take part in the training, sharing real-world operational lessons with their German counterparts. Later on, German personnel will take over the training programs.
As part of the agreement, IAI’s American subsidiary, Stark Aerospace, will continue to produce half of all components for Germany’s Arrow 3, just as it does for Israeli Arrow 3 systems.
The U.S. Missile Defense Agency
Moshe Patel, the director of the Defense Ministry’s Israel Missile Defense Organization (IMDO), also could not avoid acknowledging the significance of the deal.
“For us in the State of Israel and specifically in the Ministry of Defense, it’s a historic day. First, we are talking about a defense agreement with Germany 78 years after the Holocaust where Israel is selling a system that is going to protect German citizens. Additionally, this system has been co-developed for more than 30 years, even since Arrow 1 until now, together with our colleagues from the U.S. Missile Defense Agency. We are talking about a very major contract—more than $3.5 billion in total. The German government is going to add additional funds because more activities will be carried out in Germany, making it around $4 billion in total overall.”
Patel expressed deep gratitude to the U.S. government and the Pentagon for supporting the sale. He stressed that the U.S.-Israeli arrangements regarding the Arrow 3 will not be affected by the contract, meaning that IAI will need to establish new infrastructure for the German program and hire new employees such as engineering and production professionals in Israel and also in the United States.
To meet the 2025 deadline, work needs to begin immediately, Patel said.
Levy added, “We have been a part of this long journey together for several decades, starting with a question raised by President Reagan in the ’80s: ‘Can you hit a bullet with a bullet? Can you intercept an incoming ballistic missile?’ I believe that the work that has been done in Israel at IAI and the Ministry of Defense led us to a position where we have a system that can successfully defend against missile threats.”
The Arrow 3 system is designed to intercept exo-atmospheric ballistic missiles. “With its exceptional long-range interception capabilities, operating at high altitudes above the atmosphere, it stands as the top interceptor of its kind. The system employs a hit-to-kill approach for intercepting incoming threats,” the ministry said.
Tomer—A Government-Owned Company, Rafael Advanced Defense Systems and Stark Aerospace are the main subcontractors responsible for the development and manufacture of the Arrow 3 interceptor.
Part of the proceeds from the sale will go to bolster Israeli defense systems, according to the director general of the Defense Ministry, Brig. Gen. (res.) Eyal Zamir.
“This landmark deal, the largest defense export agreement in our country’s history, will propel Israeli defense exports to a new record following last year’s remarkable achievement of $12.5 billion [in sales],” he stated. “The Arrow 3 agreement reinforces our unwavering alliance with the USA, encompassing strategic, political-defense and industrial cooperation. Notably, system components currently manufactured in the USA for Israel will also be produced for Germany, further strengthening our partnerships with the U.S. industrial base.”
Fear of Russia
Ultimately, the deal is the latest reflection of the trend of European states turning to Israel to equip themselves with new capabilities to defend against potential Russian threats.
Earlier in August, Poland announced the purchase of hundreds of Rafael-made Spike anti-armor missiles, completing the purchase through Rafael’s Polish defense company partner, Mesko, which will produce and assemble the missile parts in Poland.
Also in August, the U.S. green-lighted a purchase by the Finnish Defense Ministry of the Rafael-made David’s Sling air defense system, marking the system’s first international sale. David’s Sling made its operational debut during the May 2023 escalation (“Operation Shield and Arrow”) between Israel and Palestinian Islamic Jihad in the Gaza Strip.
The deal, valued at some €316 million ($351 million), is the result of a years-long competitive tender and includes interceptors, launchers and radars, which will be connected to Finnish command and control systems.
In recent months, the Netherlands chose Elbit Systems’s Precise and Universal Launch System (PULS) for the Dutch Army. While Elbit has not confirmed the sale, it did state in March that it had signed a $133 million contract to supply the PULS rocket system to a European NATO client.
PULS can fire Elbit-made surface-to-surface guided rockets and missiles at a variety of ranges.