Arms sales by Israel are important for a number of reasons. They support an armed society that is all too prone to use repression and violence to support territorial claims in its occupied territories. Funds from sales of arms funds the development of new weapons, surveillance systems, etc. Furthermore, Israel has a history of indiscriminant sales of weapons to states with poor records of human rights, and which are often involved in or contemplating hostilities.
Israel has very large arms export industry, rival in size to that of Russia, at over $4.2 billion US in 2006. Israeli companies are fairly indiscriminate about who they sell to having recently completed agreements and exports to China, Iran, Georgia, Products exported include assault rifles, drones, artillery shells, missiles, armour products, various intelligence gathering products, and engineering. (Ynet news)
In 2006, the US demanded the resignation of four Israeli defense officials after Israel made sales to China, after Israel upgraded drones previously sold to China. (Ynet news 5/12/06
Israel recently sold as much as $400 million in arms to the Republic of Georgia, including drones that were subsequently involved in a scrap between Georgia and Russia. (expand)
In the past Israel has sold arms to Iran, it has sold arms to the Argentine junta which were used in the Falklands war, it has sold weapons to the Soviet backed regime in Ethiopia while it engaged in war with Somalia. (Washington Report on the Middle East, 2/11/86 Israeli Arms Sales to Iran
(This is a big subject, I’ll add more later)