Israel announced today (Thursday) the signing of an agreement with Germany under which it sold the Arrow-3 missile defense system for 14 billion shekels (about 3.5 billion US dollars), in the largest military deal in the country’s history.

The agreement was signed by Israeli Defense Minister Yoav Gallant and his German counterpart, Boris Pistorius, in Berlin today, according to a statement by the Israeli Ministry of Defense.

In addition, the two ministers signed a joint statement in which they pledged to strengthen bilateral security relations between their countries.

As part of the deal, Germany agreed to an immediate payment of $600 million that Israel will use to start producing Arrow-3 batteries for Germany, according to the statement.

“Our country has developed a relationship that includes the exchange of sensitive intelligence information, knowledge and military capabilities,” Gallant said in the statement.

He added, "Germany has contributed greatly to Israel's security, and today we are proud to contribute to Germany's security as a leading country in Europe and a strategic ally."

The Arrow missile system is a long-range ballistic missile interceptor system that can confront missiles launched towards Israel from anywhere.

Israeli military industries began developing this missile system since the mid-nineties of the last century, with American funding and support, after missiles were launched for the first time towards Israeli territory during the First Gulf War in 1991, when Iraq launched missiles towards Israel that hit some sites there after the American Patriot system failed to intercept them.

Arrow-3 missiles are considered one of Israel's military interception systems, which include Iron Dome, designed to intercept short-range missiles from Gaza, and David's Sling, which is capable of intercepting medium-range missiles.