The Israeli defence ministry is investigating a large military manufacturer, Aeronautics Defence Systems Ltd, for allegedly attempting to bomb the Armenian military while demonstrating the capabilities of its unmanned aerial vehicles (UAVs) to the Azerbaijani defence ministry, Maariv newspaper reported on August 12. The newspaper claims that it had received a  copy of a complaint against the company filed with the defence ministry.

According to Maariv, Aeronautics Defence Systems sent a team to Baku to demonstrate its Orbiter 1K UAV in July, and flew it into an "enemy target" on a "suicide" mission. The Israeli defence ministry confirmed it was investigating the complaint, but refused to elaborate. It said that "as a rule, the defence ministry does not comment on issues concerning defence exports". 

Israel is the world's largest exporter of UAVs; according to the Stockholm International Peace Research Institute, the country accounted for 41% of all UAV exports between 2001 and 2011.

In their efforts to cultivate foreign markets, Israeli defence companies have started to form joint ventures in countries where there are potential clients. In Azerbaijan, Aeronautics Defence Systems set up a join venture with the Azerbaijani defence ministry called Azad Systems, which manufactures Aerostar and Orbiter 2M aerial drones.

Baku has become one of Israel's foremost arms trade partners, having imported some $5bn worth of Israeli military equipment thus far and even signing up for the purchase of an Iron Dome anti-missile system in December 2016.

Azerbaijan's efforts to boost its military capabilities, which are also fuelled by imports from other arms manufacturers like Russia and by domestic production, are due to its longstanding conflict with neighbouring Armenia over the breakaway region of Nagorno-Karabakh. The region is internationally recognised as part of Azerbaijan, but it is populated by ethnic Armenians. A bloody war fought over it in the early 1990s ended in a ceasefire, but no resolution to the conflict has been agreed. The ceasefire has been repeatedly violated in recent years, and skirmishes at the border have become increasingly frequent.