Israel Shipyards and Rafael Advanced Defense Systems are closing in on a joint agreement to supply naval vessels and weapon systems to Cyprus worth approximately €150 million, Calcalist has learned. The deal is expected to be signed within weeks, once Israel's and Cyprus's defense ministries finalize terms through a government-to-government framework. It marks the latest step in a defense partnership that has quietly expanded over the past decade.
A Partnership Built Over Years
The companies are not entering unfamiliar territory. Less than ten years ago, Israel Shipyards delivered a patrol vessel to Cyprus designed to protect the country's exclusive economic zone, fitted with radar, command-and-control systems and two Typhoon naval weapon stations from Rafael. That earlier contract appears to have laid the groundwork for the current, larger package, which will again pair Israel Shipyards' vessels with Rafael's weapon systems for the Cypriot Navy. The two firms have also collaborated on separate defense programs involving Azerbaijan and the Philippines, suggesting a model of joint export that Israel's defense industry has leaned on repeatedly in recent contracts abroad.
Strategic Logic Behind the Timing
The emerging agreement fits into a broader Israeli push to strengthen ties with Cyprus and Greece at a moment of heightened friction with Turkey. Ankara has worked to extend its regional reach during the prolonged conflict in the Middle East, and Israel's defense establishment appears to view closer cooperation with Nicosia and Athens as a counterweight. That strategy was on full display in August, when Israel and Greece signed the €3 billion Achilles Shield agreement, committing Israel to help build a multilayered Greek air defense network using systems from Rafael and Israel Aerospace Industries. The Cyprus naval deal, while smaller in scale, extends the same logic to the eastern Mediterranean's other key partner.
A Widening Defense Footprint
Naval systems are only part of the picture. Israel Aerospace Industries has already supplied Cyprus with its Barak MX air and missile defense system, which appeared publicly during a military parade in Nicosia earlier this month marking the 66th anniversary of Cyprus's independence. Israel has not officially confirmed that contract, but the public display left little doubt about the depth of the relationship. Defense sources told Calcalist that the naval agreement now under discussion could open the door to further commercial cooperation, including possible joint manufacturing arrangements between Israeli and Cypriot defense firms.
What Remains Unconfirmed
Both Rafael and Israel Shipyards declined to comment when approached about the reported deal, in keeping with the discretion typically surrounding government-to-government defense contracts before signature. Formal confirmation is expected only once the agreement is finalized. Still, the pattern is clear: Israel's defense sector is using naval and air-defense exports to cement alliances along its northern and eastern maritime borders, turning commercial contracts into instruments of regional strategy as tensions with Turkey persist.