The Iron Beam laser and Arrow anti-ballistic missile systems are touted as examples of Israeli military ingenuity. But they were largely developed and financed by the U.S.
When Israel deployed its Iron Beam laser weapon for the first time last December, the announcement by leading Israeli defense firms Rafael and Elbit Systems was met with fawning coverage worldwide. The futuristic laser system, designed to shoot drones and rockets out of the sky, was celebrated as a demonstration of the Israeli weapons industry’s technological sophistication.
The Israeli Ministry of Defense described Iron Beam as “Israel’s first domestically developed laser interception system,” while touting the country as a pioneer in missile defense. The Arrow anti-ballistic missile system, another key example of Israel’s purportedly homegrown ingenuity, was heavily employed to defend from Iranian missile attacks during two recent wars.
That alleged ingenuity is at the center of a debate roiling Washington this month as Congress returns to debates about whether to create a new office in the Pentagon to coordinate U.S. and Israeli military research, testing, and industrial production, giving institutional architecture to a relationship that is already deeply intertwined on a de facto basis. The legislation, known as Section 219, was included in the House-passed National Defense Authorization Act, but remains contested in the Senate. Backers of the bill argue that tighter coordination with Israel should not be seen as a giveaway or cost to the United States, but rather is a boon to U.S. military capacity because the U.S. benefits more from the partnership than Israel. Arrow and Iron Beam are routinely held up as case studies of such innovation.
But the real story of how these weapons were developed is quite different. In fact, both weapons systems were developed and financed by the United States before being handed off to Israel by acts of Congress, according to government documents and interviews with key personnel involved in their development—despite warnings from U.S. intelligence agencies that transferring the tech to Israel effectively hands it over to U.S. adversaries such as China and Russia.
The pattern has long been cause for concern inside the intelligence community and among some in the Pentagon, but the mandates have come directly from Congress.
David Pyne, who worked as a civilian in the Pentagon office that oversaw development of the Arrow 2 program in the early 2000s, said it still bothered him that the American military put in so much work, and American taxpayers footed the bill, yet the U.S. couldn’t even fully benefit from the system. “They didn’t contribute a dime into the program, but the thing that pissed me off at the time, and obviously since, is that they would not share the final product,” said Pyne in relation to Israeli participation in the program.
Israel did spend money on the program, which is typically described as being split roughly down the middle by the U.S. and Israel. The U.S. directly contributed more than $4 billion, while Israel’s portion was paid for largely with U.S.-supplied foreign military financing.
That left Pyne frustrated at the amount of control Israel retained over the technology. “They wouldn’t allow us to use the technology we co-developed with them at 100% U.S. taxpayer expense,” Pyne said.
Israel Aerospace Industries (IAI) became the primary contractor producing Arrow 2, though the U.S. maintained a veto over who it could be sold to, which it exercised at one point in the case of India. In 2002, Boeing cut a deal with IAI to make component parts for it, and the U.S. has ultimately been able to exploit some of the technology.
A veteran and former top national security aide to Sen. Mike Lee of Utah, Pyne currently serves as deputy executive director of the U.S. Task Force on National and Homeland Security. While working as a civilian for the Defense Department, Pyne traveled to Tel Aviv to try to work out an agreement in which the U.S. could benefit from the research it was carrying out and financing, but was repeatedly rebuffed, he said, eventually signing a lopsided agreement in June 2001. “I’d love to say that this was unusual, but I believe that was standard operating procedure for all missile defense systems we co-developed with Israel,” he said. “That was just what we were willing to agree to.” While public statements from the U.S. and Israel emphasized the joint nature of the program, he said, in reality the U.S. put in the work and the money, while Israel and Israeli companies got the benefit.
A former Pentagon contractor who worked on the Iron Beam project—speaking on condition of anonymity due to the sensitivity of the program—told Drop Site that even in the early 2000s, the program was controversial inside the Joint Technology Office. Congress had mandated the program’s details be shared with the Israelis, but the intelligence community refused to sign off on such knowledge transfers, they said, warning that Israel would immediately resell the technology to the Chinese.
A Defense Intelligence Agency report from 1999 backs up the contractor’s claim. The report was covered by the Washington Times in an article headlined “Israel Suspected of Transferring U.S. Laser Weapon Data to China.” The DIA found that Rafael had obtained restricted American technology from TRW Inc., the U.S. defense contractor running the THEL project, in 1996, which led TRW to halt further transfers. Israel responded with a tenacious pressure campaign on the State Department and the company’s subcontractors, trying to restart the technology transfers. The DIA also found evidence that Israel was routinely transferring the technology to China and covering up the arrangement from the U.S. TRW was bought by Northurp Grumman in 2002.
Intelligence analysts would even bring Israeli defense industry marketing brochures to meetings, the contractor said, to demonstrate how flagrantly Israel was advertising its willingness to sell secret American technology to China. “We had tons of intelligence to justify not sharing the information with Israel but we were under pressure from Congress to figure it out and transfer the IP to Israel,” said the contractor. “No matter how much evidence the intelligence community produced, the response we received from DOD leadership was that it’s congressionally mandated, therefore we have to execute on the program.”
To THEL and Back
In February 1996, at the White Sands Missile Range in New Mexico, the U.S. military for the first time successfully destroyed a mid-flight warhead with a laser. The program, called Nautilus, was officially a joint U.S.-Israeli collaboration, but as a later Government Accountability Office report confirmed, the U.S. military “provided primary management functions for the program” while the “Israel Ministry of Defense provided support.”
Two months later, President Bill Clinton met with Prime Minister Shimon Peres and agreed to enter into a deeper collaboration to produce a Tactical High-Energy Laser (THEL), backed by U.S. money and research, with the aim of producing a defensive weapon that could shoot down Hezbollah rockets at the Lebanese border.
At that point the program was operating under a memorandum of agreement, signed in 1996, that set out the terms of the deal. Lobbyists working on behalf of Israel kicked into gear. Between 1997 and 2001, the Israeli weapons maker Rafael and the Israeli Ministry of Defense spent more than $4.4 million lobbying Congress and the White House on weapons programs, according to foreign agent registration disclosures.
In 1999, using the NDAA—the same must-pass legislation lawmakers are currently using to further fuse the two militaries—Congress mandated the Secretary of Defense to develop a high-energy laser master plan and lay out funding needs. The next year’s NDAA ordered the implementation of that program—aligning it with the agreement tying the program to Israel—and designated a senior civilian official to oversee it. By the late 1990s, the U.S. had spent more than $100 million on the program. In 2004 and 2005, Congress set aside $17 million and then $8 million for the program.
A 2024 bill provided $1.2 billion to Israel to boost its laser program, with President Joe Biden visiting to celebrate the partnership. “We have reaffirmed the unshakeable commitment to the United States to Israel’s security, including partnering with Israel on the most cutting edge defense systems in the world, including the U.S. support for the Iron Dome and Israel’s new laser-enabled system called the Iron Beam,” he said. Under President Obama, the U.S. signed a memorandum of understanding that pledged $38 billion over ten years to support Israel’s military.
The laser eventually shot down more than two dozen Katyusha rockets in tests, but the cost was soaring—more than $300 million at the time—and the chemicals used to produce the laser were deeply toxic and corrosive. The Joint Technology Office had also been researching steady-state lasers, less toxic and less corrosive to the equipment, but not enough advances had come along. So in 2005, THEL was canceled.
In 2007, Ehud Barak, who had returned to office as Israeli minister of defense, pushed to bring back the laser program, which Northrop Grumman was pursuing as “Skyguard,” but most of the investment and resources on missile defense were still directed to kinetic interceptors like the Iron Dome.
In the meantime, research continued on the solid-state laser program that would become Iron Beam, almost exclusively funded by the U.S. In 2019, Democratic Rep. Ted Lieu introduced H.R. 1795, the United States-Israel Directed Energy Cooperation Act. It was enacted the next year as part of the NDAA, instructing the Department of Defense to conduct laser research with Israel, citing THEL as the historical precedent. “THEL became Iron Beam,” the contractor said.
In a November 2023 Senate floor speech following the October 7 attacks, Sen. Deb Fischer (R-Neb.) urged her colleagues on the Senate Appropriations Committee to fund Israel’s missile defenses, calling for replenishing Iron Dome and David’s Sling and “investing in the development of the Iron Beam system,” as part of a push to win $1.2 billion in funding for the system. Congress ultimately approved the funding as part of an April 2024 national security supplemental, which appropriated $5.2 billion in total for Israeli missile defense, including the $1.2 billion requested specifically for Iron Beam.
What kind of lobbying effort was underway is less clear from federal records than it should be. After 2001, Rafael stopped filing as a foreign agent, and began filing under the Lobbying Disclosure Database, which is created for American companies or foreign companies acting independently of a foreign government, like British Petroleum. But Rafael is a 100% Israeli-state-owned company. By not filing as a foreign agent, the bulk of the company’s work remains obscured.
Rafael has received most of the public credit for the laser innovation, and controls the intellectual property, even as much of it was developed and funded by American taxpayers. Rafael did not respond to requests for comment for this story.
A review of public records also points to possible support from researchers at a variety of American universities, including Cornell University, for the project. Cornell, for instance, received a $100,000 grant from the Israeli Ministry of Defense (MOD)—money that likely originated with the U.S. Department of Defense—at the same time to provide research support to help improve fiber laser technology. This was one of several major financial contributions that the MOD made to Cornell researchers. The grants were noted in a 2020 announcement by the ministry’s research arm, the Directorate of Defense Research and Development (DDRD), which credited a decade of work by DDRD, Rafael, Elbit Systems, and unnamed academic institutions who contributed to the project.
By following a series of papers published by researchers at American universities, it’s possible to trace the incremental breakthroughs that culminated with Iron Beam.
Take Rafael Systems researcher Anatoly Parahovnik. Parahovnik became a research assistant at the University of Central Florida in the fall of 2017 specifically to help Rafael overcome engineering gaps, according to his LinkedIn and academic citations. Parahovnik was working on a central problem related to the laser technology: how to handle the extreme heat it created. According to his LinkedIn résumé, “After successfully introducing new technologies from academia at Rafael Advanced Defense Systems, [Parahovnik was] selected to pursue Ph.D. as means to close a gap the firm was experiencing in liquid cooling methods for cooling electronics.”
The position at the university was paid for by the MOD, according to an email provided to Drop Site from summer 2017. “I’m hiring a guy from RAFAEL and I want to make sure he will be supported for at least several semesters,” wrote his mentor Yoav Peles to the MOD, a request that was quickly approved. The email was obtained as part of an investigation by anti-war researcher Mila Halgren for Responsible Statecraft.
Parahovnik’s 2022 dissertation makes clear the work he was doing was directly useful to Rafael:
The adiabatic thermalization mode at the micro scale under terrestrial conditions can be used to manage high frequency thermal loads, like radar, laser systems and a range of high-frequency applications. The nature of heat transfer pertinent to the piston effect in forced convection flows is poorly understood, but if properly revealed, it holds great potential to revolutionize copious critical technologies that depend on effective thermal transport.
A key 2020 research paper, co-authored by Parahovnik and his UCF mentor Peles, notes that the work was “funded mainly by the Office of Naval Research” as well as the Israel Ministry of Defense. “The authors would like to acknowledge the Cornell NanoScale Science & Technology Facility (CNF) for staff support, help, and use of facilities in the fabrication of the microdevices,” it goes on. The paper was published in Physical Review Applied and titled, “Subcooled Flow Boiling of Carbon Dioxide Near the Critical Point Inside a Microchannel.” Another paper, presented that year at the 2020 Intersociety Conference on Thermal and Thermomechanical Phenomena in Electronic Systems, includes a similar acknowledgment. A 2021 paper in the International Journal of Heat and Mass Transfer included the same funding disclosure.
Another Rafael researcher, Tomer Rokita, came to the University of Michigan for a year of research on hypersonics. The involvement of U.S. universities in the program reflects a broader phenomenon of Israel drawing on the support of elite U.S. researchers to help advance its defense programs. American institutions and companies are producing the breakthroughs, paid for by U.S. taxpayers—sometimes routed through the Israeli MOD—yet it is Israeli companies who claim the IP and profit from sales of the new technology.
Broken Arrows
The Arrow program began in the late 1980s under the Reagan administration’s Strategic Defense Initiative, with the United States committing to fund the development of an Israeli interceptor capable of destroying ballistic missiles. By 1993, the U.S. government had already committed roughly $390 million to Arrow and its follow-on experiments, according to the Government Accountability Office, which warned at the time that Washington risked being drawn into financing much of the complete system—including its missiles, launchers and radar—without independently assessing its overall costs or alternatives.
That support continued as Arrow evolved from an experimental interceptor into a multilayered operational system that boasted new and more advanced capabilities. The Arrow 2 is designed to intercept ballistic missiles in or near the atmosphere, while Arrow 3 targets them at greater ranges and altitudes, outside the atmosphere.
Congressional appropriations records indicate that the United States had provided just over $4 billion for the Arrow program by fiscal year 2021. Subsequent appropriations for Arrow 2 and Arrow 3 bring the cumulative public total to approximately $5 billion.
U.S. financing remains embedded in Arrow’s current procurement. The Missile Defense Agency’s fiscal year 2026 procurement justification records $609 million in prior-year procurement funding for Arrow 3 components, followed by $80 million in fiscal year 2024, $50 million in 2025 and a requested $100 million in 2026.
The Iron Beam technology meanwhile has been hailed as a solution to the problems created by modern missile defense systems, where expensive and slow-to-manufacture interceptor munitions are required to shoot down cheaper missiles and drones that can be fired in abundance. Israel has touted its deployment of Iron Beam during the recent war in Lebanon, portraying it as an example of the country’s military ingenuity despite its origins in decades of U.S. military assistance.
But even then this system, created with tremendous U.S. financial assistance and other forms of handholding, is not a panacea to the problems faced by Israel in its wars.
The directed laser does not work effectively in all weather conditions and requires the operator to maintain a consistent lock on a moving target for an extended period of time. Consequently, the system is less likely to solve the challenging mathematics of missile interception than to place an additional band-aid on diminishing U.S. and Israeli interceptor stockpiles.
Regardless of the shortcomings of the system, more such joint projects are likely to be developed with the support of U.S. taxpayers as Congress searches for ways to defend against ever-cheaper drones and missiles, while also responding to a push from Israel lobby organizations in Washington to merge the country’s defense sectors in a way that future administrations will find difficult to unwind—whether the American public likes it or not.
