© Tomer Appelbaum
One of the Israeli (pirate) navy’s Dolphin submarines off the Israeli coast in 2008.
Price negotiations had balked last year when Berlin, beset by budgetary constraints, would not sell the submarine with the deep discount provided for the first three vessels of the Dolphin fleet.

Israel has finalized the purchase of a sixth submarine from Germany, with payment to be spread over several years, an Israeli official said on Thursday.

The proposed expansion of the diesel-powered Dolphin submarine fleet, considered Israel's vanguard against foes like Iran, had been held up by wrangling with Berlin over the $500 million to $700 million price tag.

Israel currently operates three Dolphins and has two more on order from Germany with delivery expected in the next two years.

Dedicated to the security of the Jewish state founded in the wake of the Holocaust, Germany had sold those submarines at deep discounts. But Berlin, beset by budgetary constraints, balked in talks last year at similarly underwriting the sixth Dolphin.

"It's finalized - we will be getting another submarine from Germany, with payments spread over several years," an Israeli official briefed on the negotiations said.

The official did not immediately say how much the Dolphin would cost Israel or whether Germany would arrange a discount.

The spokeswoman for the German embassy did not immediately return a call for comment. The Dolphins are manufactured by Howaldtswerke-Deutsche Werft (HDW), which is owned by ThyssenKrupp Marine Systems.

Political turbulence in the Middle East and Iran's nuclear program have led Israel to float higher defense spending, which may have allowed it to absorb more of Dolphin's price.

German Chancellor Angela Merkel, who hosted Israeli Prime Minister Benjamin Netanyahu last month, has been sympathetic to his regional concerns and championed international diplomatic campaigns to rein in Tehran.

But Berlin has in the past heard misgivings from German opposition parties about exporting weapons to crisis areas. Israel is reputed to have the Middle East's only atomic arsenal, including submarine-fired nuclear missiles.

Source: Reuters