Israeli Defense Minister Moshe Ya’alon cancelled a planned purchase of the V-22 Osprey tilt-rotor aircraft, Israel Hayom reported yesterday. The news comes amidst a diplomatic row between the White House and Jerusalem over derisive comments by Obama Administration officials about Israeli Prime Minister Benjamin Netanyahu. As much as the Osprey cancellation appears to be fallout from a diplomatic spat, in reality it reflects Israel’s tight budget and shifting military priorities.

One day prior to the V-22 cancellation, Israel announced it was expanding its purchase of the U.S.-made F-35 fighter from 19 aircraft to 44. Israel has already invested heavily in the F-35, which is crucial to replacing its aging F-16 fleet and maintaining its qualitative edge in the air (though it’s debatable if the F-35 will deliver everything the Israelis are hoping for).

The Osprey also seems have lost out to an Israeli purchase of three German fast missile boats, which Israel will soon need to protect its valuable offshore gas fields. In this way, the V-22 dropped to a lower priority for Israel’s war planners.

The Osprey, with its ability to land vertically like a helicopter but fly fast and far like a fixed-wing aircraft, would undeniably enhance Israel’s special operation ability. Namely, it would enable the IDF to put special forces deep into hostile territory, including rescuing fighter pilots downed on long-range missions. However, Israel’s strategic need to rule its own sky and seas apparently outweighs this ability.

The rising costs of the F-35 undoubtedly made this decision more difficult for the Israelis. The price tag per plane, thanks to a protracted period of modifications, has risen from $81.7 million in 2001 to roughly $100 million in this deal, and the expected initial operating capability has been extended from March 2013 to sometime in 2016. However, an advanced multirole fighter like the F-35 provides particular value to the Israelis, including countering enemy air forces, penetrating advanced air defense systems by stealth, or conducting precision bombing of terrorist groups hiding within urban environments.

In short, the decision not to buy the Osprey is almost certainly not tied to the current diplomatic tensions. For one, there is no other aircraft with these capabilities that the Israelis could buy from another country. Moreover, the additional purchase of the F-35 — an aircraft that will include components from American allies around the world, but is sold by U.S. defense giant Lockheed Martin — underscores this.

Patrick Megahan is a research analyst at Foundation for Defense of Democracies focusing on military affairs. He manages the website