The United States and Israel have reached final agreement on a record new package of at least $38 billion in U.S. military aid and the 10-year pact is expected to be signed this week. The deal will represent the biggest pledge of U.S. military assistance made to any country but also involves major concessions granted by Israeli Prime Minister Benjamin Netanyahu, according to officials on both sides. Those include Israel's agreement not to seek additional funds from Congress beyond what will be guaranteed annually in the new package, and also to phase out a special arrangement that has allowed Israel to spend part of its U.S. aid on its own defense industry instead of on American-made weapons, the officials said. Nearly 10 months of drawn-out aid negotiations have underscored continuing friction between U.S. President Barack Obama and Netanyahu over last year's U.S.-led nuclear deal with Iran, Israel's arch-foe. The United States and Israel have also been at odds over the Palestinians. But the right-wing Israeli leader decided it would be best to forge a new arrangement with Obama. A deal now allows him to avoid uncertainties surrounding the next president ... and to give Israel's defense establishment the ability to plan ahead. The new package for the first time will incorporate money for Israeli missile defense, which until now has been funded ad hoc by Congress. U.S. lawmakers have in recent years given Israel up to $600 million in annual discretionary funds for this purpose.