Germany will sell Israel a fourth Dolphin-class submarine – the first since 2005 – and will finance a third of its costs, reports said Wednesday. Two of Israel’s other Dolphins were paid for by Germany, while the third was half-funded by Israel. Two more are under construction.

Germany has already set aside 135 million euros for the project, a German official was quoted in press reports as saying.

Dolphin subs are the most expensive single vehicle in the Israel Defense Forces and are considered among the most sophisticated and capable conventional submarines in the world. Each submarine is armed with torpedo tubes, which are also capable of firing Sub-Harpoon missiles. The submarines are also able to deploy mines, and are reputed to be able to carry nuclear-tipped missiles.

While Israel has never admitted to having nuclear weapons – and in 2000 refused to sell Israel Tomahawk long range missiles, which could be used for a nuclear attack – Israel is rumored to have tested a nuclear-capable version of its medium-range Popeye Turbo cruise missile in 2002. That rumor held up further sales of Dolphin subs in 2003, according to reports, with Germany balking at the possibility that Israel could deploy nuclear weapons. Reports said that the two countries were also haggling over the price. The problems were finally resolved in 2006, when the two countries signed a contract for the acquisition of two more Dolphin subs to Israel.

Media analysts said that it was no coincidence that news of the deal was leaked on the day after Iranian students trashed the British Embassy in Tehran. “The story of the sale sends a message to Tehran that Israel and the West are not going to take much more of Iran’s excesses,” said one analyst. “Dolphin subs are powerful weapons, and if they are used they will wreak havoc on Iran. I’m sure the message has been received by Tehran,” the analyst added.