The UAE and Israel have established a fund to jointly acquire and develop new weapons systems, in the latest sign that the war on Iran is bringing the countries closer together, one current and one former US official briefed on the matter told Middle East Eye.
The current US official told MEE the two countries would pursue “joint acquisitions” of weapons systems as part of the new defence partnership. The UAE could also fund technological developments in Israeli air defence systems, the person added.
The agreement was cemented when Israeli Prime Minister Benjamin Netanyahu visited the UAE during the US-Israeli war on Iran, the official said. Netanyahu’s office issued an official statement regarding the visit, which sparked a rare denial from Abu Dhabi.
The UAE and Israeli embassies in Washington did not respond to MEE’s requests for comment by the time of publication of this article.
The US official added that the UAE and Israel were looking to jointly acquire and develop Counter-Unmanned Aircraft Systems (C-UAS) and other air defence systems.
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The former US official told MEE that “a lot of money” has been allocated to the fund and that purchases would likely extend beyond air defence.
“The UAE-Israel relationship is the best it’s ever been. This is the closest cooperation Israel has ever had with an Arab country,” Yoel Guzansky, a senior fellow at the Institute for National Security Studies, a think tank based in Tel Aviv, who specialises in the Gulf, told MEE.
Iran launched thousands of strikes across the Gulf in response to the US-Israeli attack in February.
The UAE was the hardest hit, with almost 3,000 Iranian drones and missiles targeting the country.
Israel deployed Iron Dome air defence batteries and personnel to the UAE to operate them during the war, US ambassador to Israel Mike Huckabee confirmed in May.
Guzansky said a joint fund to develop weapons systems was a logical next step for the two countries.
“Israel will need UAE money. We have the technology, but we lack the resources. The UAE has the resources, but lacks the technology,” he told MEE.
Israel switching from the US to UAE?
Joint defence spending can be a thorny issue. European states are joining forces to fund defence procurement with an eye towards Russia, but have faced headwinds.
It’s simpler for the UAE, which is an absolute monarchy, to allocate funds. The Gulf state does not publish a defence budget, but some governments estimate its 2026 defence spending at $27bn, or around five percent of GDP.
Diplomats and defence industry sources tell MEE that all the Gulf states are expected to increase defence spending in response to Iran’s attacks.
The UAE comprises seven emirates. Abu Dhabi, the largest and wealthiest of them, serves as the seat of the federal government. Its ruler, Mohammed bin Zayed, is president of the UAE. Abu Dhabi alone controls almost $2 trillion between its sovereign wealth funds and holds the majority of the country’s oil reserves.
‘US money is being threatened, so why not switch to the UAE? [Israel] needs to diversify’
– Bernard Haykel, Princeton University
Bloomberg reported in May that Abu Dhabi Crown Prince Khaled bin Mohammed al-Nahyan held discussions with the CEO of Mubadala Investment Company, Khaldoon al-Mubarak, and other officials about creating a defence-focused investment vehicle.
The ability of the UAE and Israel to deepen defence ties was one of the main benefits trumpeted by supporters of the 2020 Abraham Accords agreements, through which the Gulf state normalised ties with Israel.
In June 2025, UAE defence firm Edge Group acquired a 30 percent stake in Israel’s Thirdeye Systems, which incorporates AI technology into drones.
“This deal would be a continuation of the defence agreements that precede it,” Bernard Haykel, a professor of Near Eastern studies at Princeton University, told MEE. “It makes sense for both sides.”
Israel has long been a beneficiary of US taxpayer subsidies in the defence space. In addition to the roughly $3bn per year the US spends on Israel in foreign military aid, it spent an additional $21bn on its defence up until September 2025, according to Brown University’s Costs of War Project.
Prime Minister Benjamin Netanyahu himself has said that Israel may need to phase out US aid. Support for Israel has plummeted in the US, particularly among younger voters across the political spectrum.
“The UAE has money,” Haykel said. “This is a time when US money is being threatened, so why not switch to the UAE? [Israel] needs to diversify.”
‘Their leverage with Iran is Israel’
The UAE, Saudi Arabia and Qatar all opposed the US war on Iran, but they staked out different positions after the conflict started.
Saudi Arabia and the UAE provided expanded basing and overflight access to the US. The UAE and Saudi Arabia also launched strikes on Iran, Reuters reported.
But at the same time, Saudi Arabia pivoted to supporting Pakistani mediation to end the war, while the UAE reportedly tried to prevent the talks and lobbied in public and private for the US to continue attacking Iran.
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Abu Dhabi is particularly alarmed that the war will end with Tehran emboldened, Firas Maksad, the managing director for the Middle East and North Africa at Eurasia Group, told MEE.
“The Gulf states believe they are going to be left holding the bag on any deal the Trump administration strikes with Iran, which is focused on the nuclear file and Strait of Hormuz. The Gulf states need to address Iran’s proxies, ballistic missiles and drones,” he said.
The UAE’s move closer to Israel is out of step with its neighbours. For example, Saudi Arabia has responded to concerns about the durability of Washington’s security umbrella by deepening ties with Pakistan, Turkey and Egypt.
Reuters reported on Monday that Pakistan deployed 8,000 troops, a fighter jet squadron and a Chinese air defence system to the kingdom.
“The Emiratis will not be part of that construct,” Maksad told MEE. “Their means of leverage with the Iranians is their relationship with Israel.”
“The more adversarial the relationship is with Iran, the closer the UAE will draw to Israel and develop those security ties.”
