WASHINGTON — President Obama has proposed granting Israel the largest package of military aid ever provided by the United States to another nation, but he and Prime Minister Benjamin Netanyahu remain deeply at odds over a figure for the assistance despite months of negotiations.
American officials have balked as their Israeli counterparts insisted on more generous terms for a new 10-year military aid package that could top $40 billion. The divide, which could have broad national security implications for both the United States and Israel, is exacerbated by the pent-up animosity between Mr. Obama and Mr. Netanyahu, which has been stoked by their radically divergent views of the nuclear deal withIran.
“There’s a unique place of pique for the Israelis in certain places in the administration, and I think that hovers around this negotiation,” said Robert Satloff, the executive director of the Washington Institute for Near East Policy. “It’s one of the reasons it’s taken so long to reach a decision.”
Powerful political forces are also at work. While Mr. Obama would like to burnish his legacy with an unprecedented military aid pact with Israel, some observers in the United States and Israel believe that Mr. Netanyahu is calculating that he can reach a more advantageous deal with a future president.
“At the end of the day, it’s a numbers question and a political bet about whether the Israelis can get something better from the next administration, which I think would not be a wise gamble,” said Ilan Goldenberg, the director of the Middle East Security Program at the Center for a New American Security. “I do think the longer this drags on, the less likely they are to get a deal.”
Israeli officials strongly deny that they are holding out for a sweeter agreement under a new president. One Israeli official, speaking on the condition of anonymity because he was not authorized to comment publicly on the confidential talks, said the Israeli government hoped a deal could be reached soon with the Obama administration.
At the height of the split over the Iran agreement last year, Mr. Netanyahu refused to negotiate with Mr. Obama over the terms of a package to replace the roughly $3-billion-a-year military aid deal that expires in 2018. Now, both sides say they want a deal, even as the talks approach a fifth month.
“What the United States has committed to do is to ramp up the assistance that we provide to Israel in a way that would allow Israel to be the recipient of more national security aid than any other country has ever received from the United States,” Josh Earnest, the White House press secretary, said Wednesday.
“That is an indication of the depth of this country and this administration’s commitment to Israel’s security,” he added. “Working out the details, though, is complicated.”
Mr. Earnest said he could not put a time frame on a resolution.
It has long been United States policy to ensure that Israel preserves a “qualitative military edge” over neighboring countries, on the theory that because it is much smaller than its potential adversaries, it needs better technology and training to counter threats. Israel has been the largest cumulative recipient of American foreign aid since World War II.
Wary of an impasse in the talks, 81 Republicans and Democrats in the Senate signed a letter to Mr. Obama this week urging him to conclude “a robust new M.O.U.,” or memorandum of understanding, “that increases aid while retaining the current terms of our existing aid program.”
They cited “the likelihood that Iran will resume its quest for nuclear weapons.”
Aid to Israel “needs to be increased given the security challenges in the region,” said Senator Chris Coons, Democrat of Delaware, who was a principal force behind the letter, along with Senator Lindsey Graham, Republican of South Carolina.
“It’s an important legacy item to leave the U.S.-Israel security relationship on a strong and robust footing,” Mr. Coons said in an interview. “It would provide stability, security and predictability for the Israeli people and for America’s allies in the region to conclude this sooner rather than later.”
Technical discussions about the agreement are being conducted in strict secrecy by military officials of both governments, and neither side would detail specific funding levels. But the disputes over money are grounded in more profound rifts over policy, politics and national security strategy.
While the president views the Iran agreement as having bolstered Israel’s security — along with that of the United States and the rest of the world — by restraining Tehran’s ability to develop a nuclear weapon, the Israelis believe that the lifting of sanctions on Iran has only emboldened a government that directly threatens them.
“The administration doesn’t want to lose the Iran battle after they’ve already won it by rewarding Israel with an over-the-top increase in aid,” said Aaron David Miller, vice president of the Woodrow Wilson International Center for Scholars.
At the same time, there are powerful incentives for both sides to seek a swift agreement. For Mr. Obama, the deal would cement his claim to have done more than any other president to support Israel’s security, while Mr. Netanyahu would come away with assurance that the countries’ relationship has survived an extraordinarily tumultuous and partisan period.
“The president and the White House would like to end his term putting the capstone on his persona as the most supportive of Israel’s security,” said Mr. Satloff, of the Washington Institute for Near East Policy. “The Israelis are very eager to complete this deal precisely because he is a progressive president, and having a progressive president endorse this is important for the bipartisan nature of the relationship.”
Some observers also believe that signing a generous military aid package would insulate Mr. Obama against accusations of being too tough on Israel should he decide later this year to pressure it to accept a peace deal with the Palestinians that embraces a two-state solution. The White House has debated whether Mr. Obama should do so, in an effort to preserve for a successor the possibility of a two-state solution.
If the administration takes that approach, Mr. Miller said, “they need to have laid the predicate that they’ve got Israel’s back on the security piece.”