Israel and the US are increasingly alarmed by Iran's growing power
The Israeli prime minister, Ehud Olmert, has said the aid will preserve his country's military advantage over other countries in the Middle East.
The new military aid package represents a 25% increase from present levels.
The US announced multi-billion-dollar arms deals with Saudi Arabia, Egypt, and other Gulf states last month.
Washington says it wants to help its allies in the Middle East meet their security needs and counter the growing power of Iran in the region.