WASHINGTON: Just before Christmas, the US President, Barack Obama, signed into law one of his country's biggest aid pledges of the year. It was bound not for Africa or any of the many struggling countries on the World Bank's list.

It was a deal for $US2.77 billion ($3 billion) to go to Israel in 2010 and a total of $US30 billion over the next decade.

Israel is bound by the agreement to use 75 per cent of the aid to buy military hardware made in the US: in the crisis-racked US economy, those military factories are critical to many towns.

For the first time the US is also providing $US500 million to the Palestinian Authority, including $US100 million to train security forces, under the strict proviso that the authority's leadership recognises Israel.

For many years Israel has been the largest recipient of US foreign aid, followed by Egypt ($US1.75 billion), which also receives most of its assistance in tied military aid.