Pentagon Raises Israeli Spy Threat as NDAA Seeks Deeper Defense Ties

The Pentagon’s Defense Intelligence Agency recently elevated Israel’s counterintelligence threat designation to “critical,” the highest level in its system.

The assessment was raised in recent weeks, though officials reportedly did not disclose the exact date of the change. The designation became public June 6. The disclosure comes as Congress considers legislation that would significantly expand defense technology cooperation between the United States and Israel.

U.S. officials reportedly believe Israeli intelligence services have intensified efforts to collect information regarding internal American deliberations involving Iran and conflicts in the Middle East. Officials told NBC that those concerns prompted the Defense Intelligence Agency to raise the threat designation. Israeli officials denied the allegations and reiterated that Israel does not conduct espionage operations against the United States.

The White House and Israel have denied the allegations described in those reports.

The reported assessment has drawn attention because it became public while lawmakers are debating a provision in the Fiscal Year 2027 National Defense Authorization Act (NDAA) that would deepen defense technology cooperation and industrial integration between the two countries.

What a Critical Threat Designation Means

The reported designation does not mean Israel is considered an enemy nation. Rather, it reflects the Pentagon’s assessment of the counterintelligence risk posed by potential intelligence-collection activities.

Counterintelligence programs are designed to identify, deter and mitigate efforts by foreign governments and organizations to obtain sensitive information, classified material and advanced technology. Historically, U.S. intelligence agencies have treated espionage concerns separately from diplomatic relationships. Friendly nations have frequently been accused of collecting intelligence against one another despite maintaining close military and political ties.

Federal counterintelligence activities operate under a combination of statutes, executive orders and agency regulations. Among the most important is the Espionage Act, including 18 U.S.C. § 793, which criminalizes the unauthorized gathering, transmission or retention of national defense information.

Intelligence and counterintelligence activities are also governed by Executive Order 12333, which establishes authorities and responsibilities for U.S. intelligence agencies and directs them to protect national security information from foreign intelligence threats.

The NDAA Proposal Expanding US-Israel Cooperation

The reported threat assessment became public as Congress considers a proposal that would expand formal defense technology cooperation between the US and Israel.

Section 224 of the House Armed Services Committee chairman’s mark for the FY27 NDAA would establish a United States-Israel Defense Technology Cooperation Initiative. The provision calls for expanded cooperation in defense research, development, testing, evaluation, production and sustainment.

The proposal goes beyond traditional foreign military sales and existing cooperative programs by encouraging closer collaboration among government agencies, defense contractors, research institutions and technology developers from both countries. The initiative would seek greater integration in emerging defense technologies and industrial partnerships.

Supporters view the proposal as a way to accelerate innovation, strengthen defense-industrial cooperation and improve the ability of both nations to respond to evolving military threats. Critics argue that lawmakers should carefully evaluate potential risks associated with technology transfer, industrial integration and information sharing before expanding cooperation.

Backers of the Initiative

The initiative also appears to have been closely aligned with priorities advanced by the Israeli government.

In a letter to Rep. Marlin Strutzman (R-IN) released after the House Armed Services Committee approved its version of the NDAA, Israeli Prime Minister Benjamin Netanyahu wrote he was “glad to receive your proposed Congressional resolution endorsing my plan to shift the framework for US-Israel defense cooperation from aid to partnership.”

The letter is notable because Netanyahu did not merely praise the proposal; he described the underlying concept as “my plan,” suggesting the effort reflects a policy objective sought by his government.

The proposal also received support from the American Israel Public Affairs Committee, or AIPAC.

After the House Armed Services Committee approved its version of the NDAA, AIPAC took to X to publicly thank committee members for advancing the legislation and specifically highlighted the defense technology cooperation initiative among the provisions it supported. The organization described the measure as an important step toward expanding U.S.-Israeli defense cooperation and strengthening the long-term strategic partnership between the two countries.

“Section 224 helps give America a strategic advantage by expanding our partnership with Israel in key arenas that will define 21st century warfare,” AIPAC wrote on X. “This provision helps ensure our military is working together with another innovation and technology leader to give our troops the critical edge they need to keep America safe.

“The provision builds on decades of existing U.S.-Israel defense cooperation and on the bipartisan U.S.-Israel FUTURES Act introduced earlier this year by Representatives Ronny Jackson (R-TX) and Don Davis (D-NC), making existing cooperation efforts more efficient and effective.”

The Defense Department has not publicly released details regarding the reported “critical” designation, and the exact date the assessment was changed has not been disclosed.

The NDAA remains under consideration in Congress. The House Armed Services Committee approved its version of the FY27 NDAA in June, including Section 224 and the broader United States-Israel Defense Technology Cooperation Initiative. The legislation still must pass the full House, be reconciled with the Senate’s version of the NDAA, and ultimately be signed by the president before becoming law.