Israel Redirects Arab Development Funds to Apache Buy

Israeli government ministers approved 1.03 billion shekels ($335 million) for military and defense agencies on Wednesday morning, including money intended to rescue the purchase of 12 Apache attack helicopters for the Israeli Air Force. Much of it comes from future allocations for developing Arab communities, while officials called the procurement an urgent defense need that couldn't wait.

The approval is part of two planned budget cuts totaling 3.63 billion shekels ($1.18 billion). One proposed cut, worth 2.6 billion shekels, addresses an urgent defense need. The Finance Ministry's legal adviser said defense officials warned that delaying procurement could undermine Israel's defense response.

Funding the Helicopter Purchase

Ynetnews reported that ministers approved the transfer of approximately NIS 1 billion to the defense budget in a WhatsApp vote. The money is earmarked for the urgent purchase of 12 Apache attack helicopters. Most comes from development funds planned for Arab communities between 2027 and 2029.

The cuts to those future allocations are set at NIS 169 million in 2027, NIS 342 million in 2028 and NIS 453 million in 2029, totaling NIS 964 million. The Defense Ministry also received NIS 68 million for 2026 from funds originally reserved for government interest payments and fees. Together, the adjustments total approximately NIS 1.03 billion.

Ministers heard that the funds were needed for “urgent defense procurement that cannot be delayed.” Defense Ministry officials called the purchase an immediate security priority and backed speeding up the budget process. Defense Minister Israel Katz supported the move.

A Dispute Over Procurement Funding

The budget decision followed a dispute between the Finance and Defense ministries over military procurement funding. The previous week, the ministries failed to agree on how to finance approximately $288 million of a roughly $1 billion agreement with U.S. aerospace giant Boeing to purchase 12 Apache attack helicopters, and the deal fell through. The U.S. administration had repeatedly extended the final deadline to place the order, but that deadline expired the previous week.

Earlier in the week, defense officials said the proposed emergency cuts had nothing to do with the Apache deal and accused the Finance Ministry of misrepresenting the funding dispute. On Wednesday, they acknowledged the adjustment aimed to rescue the purchase and let Israel proceed with ordering the helicopters, even though the deadline had expired.

They said Israel would cover the remaining funds needed to complete the transaction by postponing payments on other future defense contracts. Officials described this as a technical accounting measure the Finance Ministry required before the agreement could be signed.

Final Authorization Still Required

The accelerated procurement and revised payment schedule received preliminary approval in August 2026. The purchase still needs an amended government decision and final authorization from the ministerial committee responsible for defense procurement. That committee hasn't given the order final procurement approval.

The Knesset's joint committee overseeing the defense budget was expected to approve a separate NIS 17.5 billion transfer to the defense establishment the following week, after the Finance Committee had approved it. That transfer is separate from the approximately NIS 1.03 billion adjustment ministers approved on Wednesday.