Israel is expected to face a $500 million reduction in aid it receives from America due to Barack Obama's budget cuts. Direct military aid which helps to develop anti-missile batteries will be affected. The cuts will be made because budget negotiations between Obama and the US Congress to avoid reductions in expenditure, including defence, have failed.
According to Yedioth Ahranoth Israel will lose up to $760 million of the $3 billion military aid which it receives from America every year. "In the coming year," said the newspaper, "Israel will lose nearly $263 million."
Yedioth Ahranoth claimed that some defence programmes in Israel will lose more than others, such as the "'Iron Dome" missile defence system which could lose the lion's share.
Obama gave an order for overall reductions in the federal budget, estimated at $85 billion, after he and congressional leaders failed to reach a budget deal. The White House released a copy of the cuts order which will have a huge impact on defence and public sector services, affecting hundreds of thousands of people. The Obama administration predicted that they will be "extremely destructive" for the country's economy and national security.