Israeli and American teams are putting together a plan to increase annual U.S. military aid to Israel by as much as $1 billion, on top of the current $3.1 billion, a source close to the military aid process said Wednesday.

Talks on military aid started recently, and are now being discussed by the professional staffs of the two countries’ defense establishments. For now, Israeli defense officials are calling news of the large aid increase “rumors.”

Israel refused to hold talks on the military aid framework and the “compensation package” it will receive because of the Iranian nuclear agreement, until that agreement was approved.

Open gallery view U.S. Secretary of Defense Ash Carter (R) and Israel's Defense Minister Moshe Ya'alon in Tel Aviv, July 20, 2015. Credit: Reuters

A senior defense official said that because the Iranian nuclear agreement would require the arming of various Arab countries, particularly the Gulf states, “an answer for preserving [Israel’s] qualitative military edge was required — and everyone is aware of this.”

The Israeli decision to wait until the final approval of the Iranian nuclear agreement was not well received in the Obama administration, which saw the postponing of the talks as a waste of time in improving Israel’s defensive capabilities with the American aid.

The agreement on U.S. military aid to Israel allows Israel to purchase weapons as well as other equipment and supplies, such as fuel. Among the items included are F-35 airplanes. A significant increase in this aid would allow Israel to also buy V-22 tilt rotor aircraft, a deal agreed to last year but postponed due to shortage of funds. The V-22 deal is estimated at a cost of $1.3 billion.

U.S. military aid to Israel began in 1962, with the cumulative sum now standing at about $100 billion.

Defense Minister Moshe Ya’alon is scheduled to visit the United States at the beginning of next week for what is described as a “work trip.” He will meet with his U.S. counterpart Defense Secretary Ashton Carter. American military aid is expected to be a main topic of their meeting. Ya’alon’s visit was scheduled a long time ago, but because of the present security situation it was cut short by two days.