Israel agreed to purchase four new missile boats from Germany, specifically for the purpose of protecting offshore gas facilities in the Mediterranean Sea, Prime Minister Benjamin Netanyahu announced on Thursday.

The new deal comes after a minor crisis in Israeli-German relations in October, specifically relating to missile boats.

Throughout 2014, Israel and Germany were in talks to purchase three missile boats from Germany, for a reported €900 million ($1.1 billion) price tag.

Israel originally asked for a 30 percent discount, like it had received in previous deals on German submarines. The German reduction in cost, tantamount to a grant of hundreds of millions of euros, was part of Chancellor Angela Merkel’s policy to bolster Israel’s security.

However, in the beginning of May, about two weeks after peace talks between Israel and the Palestinians stalled, German’s national security adviser Christoph Heusgen told his Israeli counterpart Yossi Cohen that Israel would not receive the discount and would have to pay their full price.

Open gallery view Israel Navy missile boat. The navy is looking to buy the cheaper frigate-class ship. Credit: IDF Spokesman's Office

Heusgen said that following the breakdown in the peace talks, combined with the harsh criticism in Germany of Israel’s construction in the settlements, the Bundestag would not approve a grant of hundreds of millions of euros to subsidize the boats.

The German decision deepened the crisis that has been developing between the two states over the past five years, due to the tense relations between Merkel and Prime Minister Benjamin Netanyahu. However, Berlin eventually agreed to slash €300 million (about $382 million) off the cost.