Israel's military planners said the country will purchase three more missile-firing submarines from Germany and build two corvettes that could be armed with the first naval version of the Arrow anti-missile system.
The planners say that the navy, long the Cinderella of the Jewish state's armed forces, must have strategic reach to increase the country's deterrence capabilities against Iran.
"By far the smallest branch of the Israeli military, the navy has made an impressive leap in its capabilities in recent years, turning it into a major player in the country's military operations," Jerusalem Post defense correspondent Yaakov Katz wrote.
"But at the same time, its future hangs in the balance as the General Staff deliberates whether to approve an ambitious plan to purchase two new large vessels that the navy has requested to meet the challenges it faces in the region."
The current wave of political upheaval in much of the Arab world could produce significant changes in the geostrategic position of Arab regimes that would be adverse to Israel.
Egypt, for instance, which fought Israel in five wars from 1948-73, was, until the Feb. 11 fall of President Hosni Mubarak, a staunch peace partner with Israel.
But there is widespread opposition to their historic 1979 peace treaty among Egypt's population. That could result in growing tension between the neighbors whose navies operate in the Mediterranean and the Red Sea.
The key element in the Israeli navy's transition from being essentially a coastal force to a wide-ranging deep-water force is its flotilla of German-built, Dolphin-class submarines.
They reportedly are armed with nuclear-tipped missiles that are seen as a second-strike capability against Iran if it unleashes nuclear weapons against Israel.
The submarines are the most expensive military platforms used by Israel's armed forces.
Israel took delivery of three of the 1,625-ton Dolphins in 1998-2000. Germany picked up most of the $500 million-$7 million cost for each of the boats as part of reparations for World War II.
The Israelis are about to receive three more Dolphins, all upgraded models, built by the Howaldtswerke Deutsche Werft in Kiel.
Two boats, each with a price tag of more than $500 million, are scheduled for delivery over the next two years, with Germany covering one-third of the cost.
In July, Berlin agreed to pay 20 percent of the cost of a sixth boat scheduled for delivery in 2015.
With six Dolphins, the Israeli navy could maintain a stronger presence off Iran.
Purchase of the sixth Dolphin was opposed by senior Israeli commanders in 2010 because it ate up funds they wanted spent on ground and air forces.
Israel's plans to acquire an initial batch of 20 Lockheed Martin F-35 stealth fighters for $2.75 billion and to develop anti-missile systems to counter the threat of massive missile attacks by Iran, Syria, Hezbollah and Hamas have made massive bites into the military's procurement plan.
But as naval operations in the Red Sea and Arabian Sea expand, navy chiefs are pressing for at least two new major missile-armed surface combatants to protect Israel's shipping lanes on top of the three Sa'ar-5 and eight Sa'ar 4.5 class corvettes currently in the navy's inventory.
An estimated 99 percent of all goods arriving in Israel come by sea, as 90 percent of military hardware and security-related imports.
Plans to purchase the warships fell through because of funding problems. The current proposal is to buy designs from Germany's Blohm + Voss shipbuilders and build the vessels at Israel Shipyards, a private concern in Haifa which already builds Shaldag patrol boats.
The vessels, each costing a projected $300 million, are "the center of a heated debate at the military's top levels over the navy's raison d'etre and the role it's supposed to play in times of war -- and also of peace," Katz wrote.
"The main argument in favor of investing in naval firepower capabilities is that in a future war, the air force and ground force bases would come under heavy missile fire," he noted. "The ships can operate out of range of Hezbollah's missiles."