By Patricia Zengerle
WASHINGTON (Reuters) - Four Republican U.S. lawmakers said on Tuesday they would seek to overturn parts of a $38 billion military aid agreement with Israel, setting up a showdown with President Barack Obama over the package days after it was signed.
Senators Lindsey Graham, Kelly Ayotte, John McCain and Ted Cruz told a news conference they wanted to add a measure giving Israel an additional $1.5 billion in military aid to a bill expected later this year to renew U.S. sanctions on Iran.
Arguing that Congress, not the administration, sets spending policy under U.S. law, they objected to a provision in the agreement preventing Israel from asking for additional funds from Congress after the new Memorandum of Understanding (MOU), begins at the end of fiscal 2018.
"This is a very dramatic moment in the U.S.-Israel relationship between Congress and the state of Israel. Congress is not going to sit on the sidelines," Graham said.
The four senators also object to Israel's agreement to return any money if Congress tries to send it more than $3.8 billion per year before then.
Graham said he would introduce legislation to overturn a provision in the agreement that phased out a special arrangement that has allowed Israel for decades to use 26.3 percent of the U.S. aid on its own defense industry instead of on U.S. weapons.
U.S. and Israeli officials signed the agreement on Wednesday. The 10-year, $38 billion package is the largest in U.S. history. It was reached after nearly 10 months of negotiations that underscored continuing friction between Obama and Israeli Prime Minister Netanyahu.
But Netanyahu decided it would be best to forge a new arrangement with Obama, who leaves office in January, rather than hoping for better terms from the next U.S. administration, according to officials on both sides.
The senators insisted that Netanyahu had been forced into signing because Israel's arch-enemy Iran is growing stronger as it obtains billions of dollars unfrozen under a nuclear agreement reached last year.
"Now is not the time to say that we're going to nickel and dime Israel," Graham said.
Republicans, and some of Obama's fellow Democrats, strongly oppose the nuclear pact. They angered the White House in 2015 by inviting Netanyahu to give an address to Congress opposing it.
They have offered several pieces of legislation to overturn or undermine the nuclear deal, and sought to make it an issue in the 2016 U.S. elections.
(Reporting by Patricia Zengerle; Editing by James Dalgleish)