US, Israel to close deal over 'largest-ever' aid package

The United States is close to signing a multibillion-dollar military aid package to Israel, Reuters reported a senior US official as saying on Wednesday.

Washington wrapped up three days of closed-doors discussions with Israel over a new 10-year defence deal to replace the current one, which expires in 2018 and is worth more than $3 billion a year.

Under the current agreement, Israel also receives funding for projects including its Iron Dome missile defence system.

President Barack Obama's administration is now close to striking the deal with the Jewish state after gaps were closed during the negotiations.

"We've made progress and closed many of the remaining gaps. We hope soon to be able to reach a final agreement," a senior official told Reuters after the talks ended.

However, the official declined to give a timetable for completing negotiations and closing the deal.

A sticking point has been a Washington demand that Israel spends all US military aid on purchasing US-made weapons, a source said.

Binyamin Netanyahu's government also seeks an increase in the annual amount of military assistance the US provides Tel Aviv.

Washington is set to sign a new memorandum of understanding with Israel that would "constitute the largest single pledge of military assistance to any country in US history," a White House official told Reuters.