The US on Wednesday announced an aid deal that will give the Israeli military $38 billion over 10 years.
"This is a sign of our unshakable, ongoing commitment to Israel's security," State Department spokesman Mark Toner said about the deal that is the culmination of months of negotiations and is the largest-ever military agreement the US has ever had with another country.
The US has been giving $3.1 billion in military aid to Israel annually under the existing Memorandum of Understanding between Washington and Tel Aviv that will expire in 2018.
The deal includes $33 billion in foreign military financing funds and a $5 billion commitment in missile defense assistance.
Washington added a new provision to the deal that requires all of the funds to be spent on American military industries which was one of the sticking points of the negotiations because Israel wanted to spend some of the money internally on Israeli military technology.
The new provision is a "short-sighted change in policy", according to leading Republican Lindsey Graham, who has been a staunch pro-Israel lawmaker.
"Under our old agreement Israel was allowed to develop cutting-edge military technology and was required to share this technology with the United States," he said. "I do not believe this new provision will serve the interests of the United States or Israel."
According to the White House, since President Barack Obama took office in 2009, the U.S. has provided Israel with more than $23.5 billion in military assistance.
Obama issued a statement following the signing ceremony characterizing it as "the most recent reflection of my steadfast commitment to the security" of Israel.
"This commitment to Israel's security has been unwavering and is based on a genuine and abiding concern for the welfare of the Israeli people and the future of the State of Israel," he said.
Obama said he would press for a two-state solution to the Israeli-Palestinian conflict, noting "the deeply troubling trends on the ground that undermine this goal."