Israel and Greece will sign a €3.1bn ($3.6bn) agreement on August 31 for the sale of air defence systems to Athens, a senior Greek official told local Globes newspaper.

Tensions between Greece and Turkey have been simmering in recent weeks, seemingly advancing in parallel with Israel’s rising feud with Ankara. As a result, Greece’s new defence deal appears aimed at strengthening Athens' defensive capabilities in the event of a military escalation with its neighbour to the east. 

Greece mobilised some of its F-16s on August 28 to intercept a Turkish drone operating near Samothraki and Lemnos, two Aegean islands adjacent to the Turkish coast.

Ankara issued a presidential decree two weeks earlier establishing "national marine parks" around the islands, an attempt to convert a disputed maritime boundary into an established fact.

Greece's planned drone base on Rhodes has drawn a formal Turkish Defence Ministry objection claiming the deployment would violate the island's demilitarised status and undermine stability in the Aegean.

Late last month, Greece's National Security Council approved the deal with Israel, which is set to be Jerusalem’s largest-ever defence export deal. As explained by IntelliNews, the deal, which takes place under the "Achilles Shield" framework, consists of three layers of air defence systems.

This includes Rafael's David's Sling in the upper tier, Israel Aerospace Industries' Barak MX in the middle tier, and Rafael's Spider in the lower tier.

Deliveries are scheduled across 35 months, with approximately €700mn, around a quarter of the contract value, allocated to Greek industrial participants including Metalan, Skytalis, EAS, PPC, EAV, Prisma and Ionics.

Defence Ministry Director General Maj. Gen. (res.) Amir Baram will sign on Israel's behalf. The outline received Greek National Security Council approval last month.

The purchase covers only Thrace and the eastern Aegean in its initial phase, with further procurement anticipated. That geographic focus is not incidental: both areas sit directly along the contested maritime frontier with Turkey, and the Turkish missile and rocket threat extends across the whole of Greek territory.

Following years of underinvestment in military technology, Greece is procuring from a supplier whose export capability now materially exceeds Turkey's, and doing so while Ankara's relationship with Israel deteriorates on separate grounds.

David's Sling, with a 300km range and Mach 7.5 intercept speed, has rarely been exported; its only prior sale was to Finland in August 2023 for €316mn. For Israel's defence establishment, following a €2bn Spider contract with Romania and record exports of $19.2bn last year, the Greek agreement would represent the largest single air defence package sold to a NATO member.