Serbia’s recent $1.6 billion defence deal with Israeli weapons manufacturer Elbit Systems underscores a deepening political and military alliance between the two nations, while also raising questions about regional security dynamics and Serbia’s strategic realignment.
The five-year agreement, reported by Israeli media, covers a broad spectrum of advanced military technologies. Serbia will acquire long-range precision strike artillery-rocket systems, unmanned reconnaissance drones, and enhanced ISTAR (intelligence, surveillance, target acquisition, and reconnaissance) capabilities, including night-vision equipment and electronic warfare systems. This marks a significant investment for Serbia, whose 2023 defence budget stood at approximately €1.4 billion, according to the Belgrade Centre for Security Policy.
Beyond the immediate procurement, the deal includes industrial cooperation aimed at bolstering Serbia’s domestic defence capabilities. Bezhalel Machlis, President and CEO of Elbit Systems, emphasised the strategic importance of the contract, stating, “This contract reflects the strong demand for Elbit Systems’ cutting-edge technologies in Europe and demonstrates our ability to deliver integrated, multi-domain solutions.” He added, “We are proud to support a European nation in strengthening its national security through this strategic partnership. This contract also includes industrial cooperation aimed to strengthen the buyer’s national industrial capabilities in the mentioned areas.”
The deal follows a January 2025 agreement in which Serbia purchased artillery systems and drones from Elbit for $335 million. Defence analyst Aleksandar Radić suggested that these contracts are politically motivated, noting that Israeli Prime Minister Benjamin Netanyahu has been a vocal supporter of Serbian President Aleksandar Vučić. “The truth is that Vučić is actually buying the favour of relevant foreign powers,” Radić told Serbian TV station N1. He also highlighted Serbia’s recent strategic shift towards the US and Israel, predicting that the scale of this latest deal would draw significant attention—and perhaps envy—from Serbia’s neighbours.
Elbit Systems, Israel’s largest defence contractor, reported revenues of $5.5 billion in 2023 and employs around 20,000 people globally. The company’s growing presence in Europe signals a broader trend of Israeli defence firms expanding into new markets, particularly in Eastern Europe, where nations are seeking to modernise their militaries amid rising geopolitical tensions.
Serbia’s decision to invest heavily in Israeli defence technology reflects broader shifts in European security alliances. As NATO members and other European nations reassess their defence strategies in response to Russia’s war in Ukraine, Serbia’s alignment with Israel and the US could reshape regional power dynamics. The deal also raises questions about how neighbouring countries, particularly those with historical tensions with Serbia, will respond to this military modernisation.
While the contract strengthens Serbia’s defence capabilities, it also underscores the geopolitical manoeuvring of President Vučić, who has sought to balance relations with both Western powers and traditional allies like Russia. The industrial cooperation aspect of the deal could further integrate Serbia into global defence supply chains, potentially positioning the country as a key player in regional security.
As Serbia continues to modernise its military, the Elbit Systems contract may serve as a model for future defence partnerships in Europe. However, the political implications of this alliance remain a critical factor, with potential ramifications for stability in the Balkans and beyond.