(AFP) – The United States on Wednesday signed a landmark agreement to provide Israel with $38 billion in military assistance over the next decade, the largest such aid package in US history.

The deal will allow Washington’s chief Middle East ally to upgrade most of its fighter aircraft, improve its ground forces’ mobility and strengthen its missile defence systems, according to US officials.

While the package constitutes the most US military aid ever given to any country, it entails concessions by Israeli Prime Minister Benjamin Netanyahu, according to officials on both sides.

Those include Israel’s promise not to seek additional funds from Congress beyond what will be guaranteed annually in the new package, and to phase out a special arrangement that has allowed Israel to spend part of its US aid on its own defence industry instead of on American-made weapons, the officials said.

White House National Security Advisor Susan Rice hailed the agreement. “No other Administration has done more for Israel’s security, and US commitment to Israel will remain unshakeable,” Rice said.

President Barack Obama’s eight years in office have been marked by friction with Netanyahu, with the two leaders at odds over a US-led nuclear deal with Iran and over mired peace talks with Palestinians.

The negotiations for the landmark military package announced on Wednesday took nearly 10 months to complete.

Obama’s aides wanted a new deal before his presidency ends, seeing it as an important part of his legacy. Republican critics accuse him of not being attentive enough to Israel’s security, which the White House strongly denies, and of taking too hard a line with the Israeli leader.

Funding until 2028

The $38 billion memorandum of understanding covers US fiscal years 2019-2028 and succeeds the current $30 billion MOU signed in 2007, which expires in 2018.

“Prime Minister Netanyahu and I are confident that the new MOU will make a significant contribution to Israel’s security in what remains a dangerous neighbourhood,” Obama said in a written statement.

The agreement was signed at the State Department by US Undersecretary of State Thomas Shannon and by Jacob Nagel, acting head of Netanyahu’s national security council.

According to a White House “fact sheet,” the deal includes annual payments of $3.3 billion in so-called foreign military financing and $500 million a year for Israeli missile defence funding.

It will also lead to the elimination of a longstanding provision that has allowed Israel to use about 13 percent of the US aid to buy military fuel.