The Navy is seeking to broadly expand its coast guard role in order to add a new dimension to Israel's strategic depth, by procuring larger strike vessels equipped with cruise missiles and advanced radars.
The package for at least two ships with an option for at least two more would cost about $500 million each, industry sources said. It is a move that has met with opposition in parts of the IDF – particularly from the Air Force, whose budget would likely be cut and funds transferred to the Navy.
Proponents of the plan say it is vital to correct a lack of strategic depth that has put the Air Force in an increasingly vulnerable position.
"Israeli air superiority only exists in the air," said Yuval Steinitz, chairman of the Knesset Foreign Affairs and Defense Committee, and a strong supporter of investment in the Navy.
He said a combination of the proliferation of surface-to-surface rockets, urbanization, and the threat of guerrilla attacks has exposed the static air bases in Israel as the Achilles' heel of Israel's strategic doctrine.
"The air force can't be the only pillar upon which rests the security of the state. We have to have an alternative," Steinitz told The Jerusalem Post. "This alternative can be found at sea, and it is not an air craft carrier."
While declining to be specific about what kind of ships the Navy should have, Steinitz said it should be a large enough platform to contain cruise missiles and drones and advanced marine cannons. This could include platforms up to frigate size which weigh in at more than 4,000 tons.
Senior Navy officers have said that they want to play a more participatory role in the future battlefield.
"We (in the IDF) have to make some cold calculations, regardless of the color of our uniforms, to break out of our conventions," said one senior Naval officer.
A consortium called AFCON made up of Lockheed Martin weapon systems, Bath Iron Works shipyards, and the Spanish ship designers Izar, have proposed a corvette for the Israel Navy.
Their proposed corvette, made to Navy specifications, is 101 meters long and displaces 2,750 tons. It can reach a maximum speed of 32 knots and would have a crew of 90. According to industry officials, the vessel could be equipped with 32 cells to launch cruise missiles, plus 16 anti-ship Harpoon Block 2 missiles, and a few dozen defensive Barak anti-ship missile missiles, as well as torpedo launchers.
It would also contain a relatively large landing pad and hangar for SH-60 ("Seahawk") helicopters.
But more strategically, the AFCON corvette would be equipped with an Aegis SPY-1F Phased Array Radar that can track multiple targets, interfacing with other radar systems like the Arrow 2's Green Pine to provide a complete battlefield picture of the eastern Mediterranean basin.
"This would be the most powerful corvette in the world, built to fight," said Alan Doughty of the Bath Iron Works, whose shipyard in Maine is offering to construct the hull.
Other options being considered are to take the 86-meter long Sa'ar 5 missile boats and insert a "plug" that would provide Aegis radar systems and limited cruise missile capability. Northrop Grumman may team up with Ingalls shipyards of Mississippi, and Raytheon for this option.
Whatever option chosen, the ships would be paid for from the $2.2 billion in annual US military grants.
Israel already has three Dolphin-class submarines virtually donated by Germany, which have extended its "long arm". Foreign reports have said that they are equipped with cruise missiles, but these are mainly seen as "second strike platforms." Government officials have confirmed that Israel is seeking more submarines, but Germany reportedly turned down a request this week for another pair.
The Navy wants an Aegis-capable vessel that can supplement early warning to airborne threats, such as Scud missiles. The United States Navy deployed an Aegis warship off the Israeli coast during the recent war with Iraq.
Defense industry officials hope that contract negotiations could be sealed by the end of next year, with delivery of the first vessel by 2008.
However, there is a serious question mark on the whole idea, with Air Force and Ground Forces commanders opposing the purchase, which would come at their expense.
Ironically, the decision regarding what would amount to a revolution in Israel's military concept comes as the government is pressed to cut the defense budget. Senior IDF commanders have bemoaned the difficulty in Israel to maintain serious long-range planning.
"To change the defense doctrine you need political stability, and there have been too many changes," said a senior IDF officer who spoke on condition of anonymity.
Yet, this naval option could prove to be less expensive than future aircraft procurement. Israel is currently in the midst of the delivery of 102 Lockheed Martin F-16 I fighter/bombers, the largest-ever defense procurement in the history of the state at $4.5 billion.
For the moment, the most powerful navy in the eastern Mediterranean belongs to Egypt, which has some 62 combat vessels, most of them surplus from the American fleets.
"We have to turn the eastern Mediterranean Sea into an Israeli sea. Our platforms have to move beyond guarding the coast and sea routes to attack. Thus we will be able to extend our strategic depth," said Steinitz.