According to Defense News, Israel and Germany are close to cutting a deal on an additional Dolphin class submarine, and on two stretched A-100 corvettes. The latter has been in the works for some time now. Interestingly, the deal depends on German financing (up to a third of the total price) and on US permission to use part of the annual military aid budget on acquisition of the ships. The corvettes will provide the core of Israel's future surface capability, while the additional Dolphin will, upon delivery, give the IDF a total force of six submarines. The German interest in financing would be to hold together its moribund ship-building industry while maintaining good relations with the Israelis. Merkel and Netanyahu apparently hammered out the details in a summit meeting last week.
Incidentally, the Defense News article reports that the two Dolphin class submarines contracted for in 2005 will be delivered in 2012.
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