The involvement of Prime Minister Benjamin Netanyahu's personal attorney in the negotiations between Israel and Germany over the purchase of submarines has led to the makings of a political crisis.
David Shimron, an influential lawyer and one of the prime minister's closest confidants, worked as a lobbyist for the representatives of German corporation Thyssenkrupp while it was in talks with the Defence Ministry over the construction of new submarines and billion-dollar maintenance deals.
Allegations first published last week by Channel Ten over Mr Shimron's involvement in the deal were coupled with details of the conflict between the prime minister, who is in favour of enlarging the underwater fleet, and the defence establishment, which prefers to spend less on a smaller number of submarines.
On Wednesday, Attorney General Avichai Mendelblitt announced he was instructing the police to launch a probe into the case.
Mr Netanyahu's office has insisted he had no knowledge of his attorney's connection with Thyssenkrupp and that all his decisions on the naval contract were based on Israel's strategic needs. However, details of Mr Shimron's participation in a meeting on a proposed dry-dock for the submarines and an email between senior defence officials mentioning both the prime minister and his attorney's interest in the deal have intensified speculation over a conflict of interest at the highest levels.
The question marks over the deal increased after the intervention of former defence minister Moshe Yaalon, who was replaced in his position by Avigdor Lieberman earlier this year following a coalition deal between Likud and Yisrael Beitenu. Mr Yaalon, along with the IDF's general staff, opposed purchasing more submarines, while Mr Lieberman was in favour. Last Thursday, Mr Yaalon wrote on Facebook that the recent allegations were "very disturbing and necessitate a comprehensive proof of the relevant factors". He also claimed the version of events provided by the National Security Council to back up the prime minister did "not reflect reality".
Israel's navy has expanded its once small submarine flotilla over the past two decades, adding five advanced Dolphin submarines. A sixth submarine is scheduled to arrive in 2018.
According to foreign sources, the Dolphin vessels are capable of launching missiles carrying nuclear warheads. Since the early years of Israel's nuclear programme in the 1950s, there has been disagreement between the military and the politicians over funding, with the generals arguing that Israel's precious resources should be spent on its conventional forces. The latest version of this argument is over the number of submarines necessary for a "second strike".