This is but one small example that the US aid to Israel is harmful to the Israeli economy. The overwhelming part of this aid comes per the agreement in the form of purchasing defense products from US companies. So from American prospective this aid money is actually government subsidies to American industry (as well as taking off potential competition from Israeli industry).
Another rather recent example- Israel transfered the production line of it latest APC, the Namer, from Israel to America. So now Israel is going to buy from General Dynemics an Israeli APC. It's not going to cost less to produce this machine in America and ship it to Israel. And moreover it's a blow to the Israeli heavy industry to which this is a big project.