New Delhi, June 8 -- The deal was not announced from a major defense contractor's gleaming headquarters. It came from a Salt Lake City company with $7.8 million in annual revenue announcing that it would manufacture Israeli-designed suicide drones for the United States military - exclusively.

PDYN), a mid-tier American defense technology firm, announced Monday a strategic partnership with Israel Aerospace Industries under which Palladyne will acquire exclusive production and marketing rights for IAI's HARPY, HAROP, and Mini HARPY loitering munition systems, adapting them for US operational requirements and manufacturing components and subsystems domestically. The target customer is the US Department of War.

The announcement marks the fi...