The Israeli Ministry of Defense and the Trump administration have launched formal talks on a “new security cooperation framework” to replace the current U.S.-Israel memorandum of understanding on military aid upon its expiration in 2028, the ministry said in a statement on Friday. 

The Israeli team will be led by Defense Ministry Director-General Amir Baram and Israeli Ambassador to the U.S. Yechiel Leiter, while the U.S. team will be led by State Department counselor Daniel Holler and U.S. Ambassador to Israel Mike Huckabee.

The two sides held a formal inaugural meeting this week and have further discussions planned in both countries in the coming weeks, the ministry said, without specifying a timeline for when the talks might conclude. 

The new agreement, according to the statement, is designed to “strengthen the IDF’s qualitative military edge through expanded joint investment in research, development, and co-production” as well as “deepen the U.S.-Israel partnership demonstrated during [the Iran war].” 

The framework will also aim to “gradually transition from aid to a completely reciprocal relationship,” a goal Israeli Prime Minister Benjamin Netanyahu has championed in recent months. 

Earlier this week, Netanyahu told CNBC’s Sara Eisen that he wants to start winding down U.S. aid to Israel “in the last two years of the Trump administration,” suggesting he may also be looking to alter the terms of the current MOU, which guarantees Israel $3.8 billion annually in military aid through FY 2028.

Israel’s Iron Beam system, which intercepts missiles with lasers, will be delivered to the IDF for initial operational use at the end of the month, Brig.-Gen. (res.) Daniel Gold, head of the Israeli Ministry of Defense Research and Development Directorate, said at the International DefenseTech Summit at Tel Aviv University on Monday. 

“With development complete and a comprehensive testing program that has validated the system’s capabilities, we are prepared to deliver initial operational capability to the IDF on Dec. 30, 2025. Simultaneously, we are already advancing the next-generation systems,” Gold said.

According to Gold, “the Iron Beam laser system is expected to fundamentally change the rules of engagement on the battlefield.”

Former Israeli Finance Minister Yuval Steinitz, chairman of Rafael Advanced Defense Systems, which developed and produced the Iron Beam system, told the Misgav Mideast Horizons Podcast in an episode to be released Wednesday that the new missile defense system represents a “laser revolution.” (Jewish Insider’s Lahav Harkov co-hosts the podcast.)

“For the first time in human history, we are able to shoot down missiles, rockets, even artillery shells, mortar shells, cruise missiles, airplanes as well — not with projectiles, not with missiles or artillery shells, but with light,” Steinitz said. 

According to Steinitz, American, Chinese, British, German and Russian companies have tried to develop effective laser weapons for decades. 

“We managed to do it and we already intercepted [projectiles] in tests,” he said, noting that Lite Beam, a smaller version of the Iron Beam system, was successfully used in October 2024 to intercept roughly 50 UAVs shot at Israel by Hezbollah from Lebanon. 

“This is revolutionary, and I am confident that this is just the beginning,” he added.

Iron Beam will initially be used to shoot down short and long-range missiles from Lebanon and Gaza, and the combined use of Iron Beam and the Iron Dome and David’s Sling missile defense systems, also produced by Rafael, will bring Israel close to 100% interception, Steinitz said. 

He does not expect Iron Beam to fully replace Iron Dome nor David’s Sling in the coming years, because factors such as poor weather conditions and very large barrages could make the laser systems less effective.

The use of the laser system will also drastically lower the costs of missile defense, Steinitz said, because each use of the Iron Beam system costs around $3, as opposed to about $50,000 per Iron Dome interceptor. As such, it will cost less for Israel to intercept a rocket than it costs for its enemies to produce them, at $5,000-10,000.

In addition, Steinitz said that the Iron Beam system works faster than the Iron Dome.

“Once the [rocket] is rising over Gaza, interception will start immediately, because the laser can reach the incoming rocket at the speed of light,” he said. “With the Iron Dome, it’s two missiles flying, one from Gaza and one from Tel Aviv to meet each other midway.” 

Shooting down rockets over Gaza will also mitigate the need for Israelis to run to shelters and safe rooms due to falling missile and interceptor fragments.

“We won’t sound the alarm in Tel Aviv, because we should be able to see [an interception] immediately if we succeed to intercept, and if we fail to intercept, we will have another opportunity, and then we shall put on the alarm,” Steinitz explained.

Steinitz also said that in the coming years, Rafael is likely to develop laser-based systems to intercept longer range missiles, such as those shot at Israel by the Houthis from Yemen and by Iran in the last two years.