After three rounds of talks between the United States and Israel, negotiations on a new military aid package have become stuck as the two sides try to strong-arm one another.

After Prime Minister Benjamin Netanyahu said at Sunday's cabinet meeting that if Israel's security needs would not be met, he would not sign a deal and would instead wait for the next president to take office in January 2017, senior U.S. officials reacted angrily and warned that the budgetary situation would not improve, and that Israel would not get a better deal with the next president.

"Even as we grapple with a particularly challenging budget environment, this administration's commitment to Israel's security is such that we are prepared to sign an MOU [memorandum of understanding] with Israel that would constitute the largest single pledge of military assistance to any country in U.S. history," the senior official told Haaretz.

"Israel is of course free to wait for the next administration to finalize a new MOU should it not be satisfied with such a pledge, but we would caution that the U.S. budgetary environment is unlikely to improve in the next 1-2 years and Israel will certainly not find a president more committed to Israel's security than is President Obama."

The official stressed that talks are "taking place in the context of a challenging budgetary environment in the United States that has necessitated difficult tradeoffs amongst competing priorities including not just foreign assistance and defense but also domestic spending." According to the official Israel currently receives over 50 percent of the total foreign military aid the U.S provides around the globe.

"Despite these [budgetary] limitations, based on extensive consultations with Israel on its threat environment and in-depth discussions within the U.S. government regarding Israel's defense needs, we are confident that a new [memorandum] could meet Israel’s top security requirements and preserve its qualitative military edge," he said.

According to them, Israel's security is a top priority for the Obama administration and to the extent that it can reach a new security memorandum of understandings it will further exemplify President Obama's commitment to Israel's security

"From the $20.5 billion in Foreign Military Financing to the additional $3 billion in missile defense funding the United States has provided under his leadership, no other U.S. Administration in history has done more for Israel's security," the White House said.

Open gallery view Prime Minister Benjamin Netanyahu at the World Economic Forum in Davos, January 23, 2016. Credit: AP

Deadline 2018

The current security memorandum of understanding signed ten years ago between the two countries is due to expire at the end of 2018. As a result of the understanding, the United States has provided $30 billion over a decade in security assistance to Israel. In the course of meetings between Netanyahu and Obama at the White House in November, the two announced the opening of new negotiations on the memorandum for the coming decade.

"It's not yet clear that we will come to an agreement," Netanyahu told the cabinet members Sunday, in the course of a diplomatic-security briefing by acting national security adviser Jacob Nagel, who also heads the Israeli team negotiating memorandum with the Americans.

"[We] need to see if [we] can achieve a result that will address Israel's security needs or perhaps we will not manage to come to an agreement with this administration and will need to come to an agreement with the next administration."

Last Thursday, an American delegation led by Yael Lempert, the Special Assistant to the president and Senior Director for the Levant, Israel and Egypt at the National Security Council in the White House, who arrived in Israel to hold a third round of negotiations on the matter. Over the past three days, the American team held discussions with a team of counterparts from the national security staff in the Prime Minister's Office and from the Defense Ministry, the Israel Defense Forces and the Foreign Ministry. The main topic of discussion in the talks was the size of the aid that the United States would provide Israel and the conditions on its use.

Netanyahu's remarks at the cabinet meeting raise the possibility that the round of talks in Jerusalem will not achieve substantial progress. Just two weeks ago, in the course of his visit to the annual meeting of the World Economic Forum in Davos, Switzerland, where the prime minister met with American Vice President Joe Biden, and where the two discussed the matter, the prime minister sounded much more optimistic. In an interview on stage with American journalist Fareed Zakaria, Netanyahu noted that he believed Israel and the United States would manage to wrap up negotiations in a positive manner on a new security memorandum of understanding in the coming months that would outline the size of American assistance to the IDF for the coming decade.

A senior Israeli official who participated in the cabinet meeting but asked not to be identified due to the sensitivity of the subject said the contacts with the American administration are continuing but "nothing has yet been finalized and it will take more time." Another senior official who also participated in the cabinet meeting added that, despite the three rounds of negotiations, President Barack Obama's intervention will be necessary to achieve a breakthrough. "It's not a subject for staff, but rather for decisions by leaders," he said.

Next month the contacts between Israel and the United States on the security memorandum of understanding are expected to be stepped up a notch. Defense Minister Moshe Ya'alon is expected to go to Washington at the beginning of March to meet with his American counterpart, Ashton Carter. About two weeks later, Netanyahu will come to Washington to attend the conference of the pro-Israel lobby AIPAC, the American Israel Public Affairs Committee. In all probability, he will also meet with Obama in an effort to achieve a breakthrough in the talks.