Israel and Germany have begun making arrangements for the delivery of the Arrow-3 missile defense system to German forces in the coming months, as announced by Israel’s Ministry of Defense.

A recent high-level coordination meeting in Germany brought together Moshe Patel, head of the Israel Missile Defense Organization; Col. Carsten Koepper, who leads Germany’s Arrow-3 program; and Yaakov Galifat, a senior executive at Israel Aerospace Industries, the manufacturer.

The meeting also included participants from Israeli firms ELTA and Elbit Systems, German consultancy IABG, and missile manufacturer MBDA, according to the ministry’s statement.

Valued at $3.5 billion, the Arrow-3 agreement marks the most significant defense contract in Israel’s history. The United States, which co-developed the system, gave its approval for the sale in August 2023, with final authorization granted in November.

Germany’s decision to acquire the system was influenced by the ongoing conflict in Ukraine, prompting its military to enhance national defense capabilities in case of potential Russian aggression in Europe. The initial delivery of the Arrow-3 system is expected by late 2025.

The Arrow-3 saw its first operational use on November 9, 2023, when it intercepted a ballistic missile launched by Yemen’s Houthi rebels. On April 14, 2024, the system demonstrated its capacity to engage multiple threats by intercepting numerous ballistic missiles during an Iranian attack on Israel, according to Israeli officials.

Unlike the Arrow-2, which uses an explosive warhead with a proximity fuse, the Arrow-3 relies on direct impact to destroy incoming threats in space. It is also lighter and faster than its predecessor, weighing nearly 50% less.