Israel's Defence Minister, Avigdor Lieberman, tried to wrap up negotiations on a new defence aid agreement with the US during his visit to the Pentagon in Washington this week.

The talks over a new ten-year deal have faltered over disagreements both between the two countries and in Jerusalem.

The current agreement, whereby the US funds Israeli defence spending to the tune of $3 billion annually, is set to expire in 2018.

The new deal is expected to see a higher annual allocation. However, disagreements remain over the size of the increase, whether Israel can request supplementary sums for additional weapons programmes and whether some of the funds can be used to finance development and procurement in Israel. Currently, about a quarter of the allocation can be used in Israel and the Americans are interested in reducing this.

According to senior Israeli sources, Prime Minister Benjamin Netanyahu is prevaricating over signing the deal on the current terms being offered by the Americans.

Mr Lieberman and Finance Minister Moshe Kahlon have both disagreed with the prime minister and believe that the deal should be signed as soon as possible.

Senior officials have criticised the fact that instead of the diplomats and security experts who usually take part in these talks, the negotiations are now being managed solely by the prime minister's personal envoys.

There are lingering fears in the Israeli security establishment that the difficulties being experienced are a result of the tense relationship between Mr Netanyahu and President Barack Obama.

There are also concerns that the prime minister may still harbour hopes that Israel may succeed in getting a better deal with the next US president, who will be sworn in at the beginning of 2017. The Prime Minister's Office has denied that this is the case.