Israel and Greece announced a $3.5 billion defense deal on Monday, highlighting how Israel’s powerful arms industry still exerts global influence despite the diplomatic outcry over Israel’s conduct in Gaza and its occupation of the West Bank.
Greece will pay Israel to build it “a comprehensive, multilayered air defense array” that will help the Greek military defend against aerial threats like drones and ballistic missiles, the Israeli defense ministry said in a statement.
Though Israel has a smaller standing army than many rivals, its arms industry is widely considered to be world class. It has been showcased again by the cascading conflicts in the Middle East since the Hamas-led attack on Israel in 2023 set off the war in Gaza.
The agreement comes as European countries like Greece have faced growing pressure to bolster their domestic arsenals amid rapid changes in contemporary battlefield tactics. Both Russia’s invasion of Ukraine and the American-Israeli war against Iran have drained Western munitions stockpiles and laid bare the risks of modern threats like drones.
President Trump has also pushed allies in the North Atlantic Treaty Organization to jack up military spending, saying the alliance’s members have failed to pull their weight. Mr. Trump has demanded that they increase military spending to 5 percent of their gross national product by 2035.
Israel’s air defenses — particularly its Iron Dome and Arrow antimissile systems — are particularly prized by foreign militaries for having weathered repeated attacks over the past three years. They largely repelled intense volleys from Iran, which fired hundreds of ballistic missiles at Israel, as well as from Hamas in Gaza and Hezbollah in Lebanon, which have both fired thousands of rockets.
During a 12-day war between Iran and Israel last year, Iranian forces fired more than 550 ballistic missiles and 1,000 drones at Israeli territory, according to the Israeli authorities. Though 32 people were killed, the death toll was far lower than many military analysts had feared.
While Israel’s conduct during the war in Gaza has evoked fierce criticism abroad, countries both in Europe and elsewhere have continued to seek Israeli-made weapons. Revenue from Israeli defense exports surged by nearly 30 percent in 2025 to $19.2 billion, bolstered largely by sales of air defense systems, according to the Israeli defense ministry.
In December, the German Parliament approved $3.1 billion in purchases for Israel’s Arrow-3 antimissile system, despite growing discomfort in Germany at Israeli military conduct.
Nikos Dendias, the Greek defense minister, said on Monday that Greece would be the first European country to possess the kind of Israeli system it was acquiring. Athens already possesses some American-made Patriot interceptors.
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