It does, however, come with strings. It's a tool to leverage other countries to do what we want them to do.
No disagreement. Foreign aid is a tool for advancing a nation's interests, because it provides a degree of leverage/incentive for the recipients. However, it does not grant license for coercion nor does it obligate capitulation.
If Israel becomes intransigent, it could be removed.
Foreign aid is not an entitlement. So, for whatever the reason might be, a sovereign state has the freedom to choose for itself what aid it will/won't provide, to whom, etc. However, a sovereign state has to be careful not to engage in a volatile policy. If it does that, it loses reliability. When that happens, such a state finds it difficult to gain partners/cooperation, even when it has a need for partners/cooperation.
Every sovereign state also has critical interests. No sovereign state can realistically expect:
1) That all of its interests will be shared by all other sovereign states. A classic case that is unfolding is that the threat posed by a nuclear-armed Iran differs when it comes to the U.S., China, and Russia. U.S. interests would be placed at greater risk than those of China or Russia. At the same time, the economic costs of additional sanctions would be higher for China and Russia than for the U.S., which currently conducts very little trade with Iran. Hence, those three states have substantive differences that mirror their interests/risk exposure when it comes to the impact of possible measures aimed at reducing the prospect of Iran's attaining a nuclear weapons capability.
2) That another sovereign state would abandon its critical interests to serve the policy aims of another. The price for doing so would be steep. Mere promises of support or pledges of solidarity wouldn't even begin to cut the muster. Concrete measures would need to be taken to compensate a state for its relinquishing a critical interest, and most critical interests are off limits. In the context of the situation concerning Israel, specifically its new demand that Israel release hundreds of Palestinian prisoners as a "good faith" measure, the U.S. has made no binding commitments of any kind that it would compensate Israel for any harm such a prisoner release would cause or that it would punish the Palestinians (e.g., drastically reduce aid) should they fail to reciprocate with concessions of their own on matters that are important to Israel.
3) That its mere words of support/friendship are credible. Credibility is developed over time from a record of reliability. Words of support/friendship, particularly after a state has tried to break an ally ring hollow. Friends can express strong disagreement over policies. They do not cross the line where they try to impose outcomes on their friends.
If a nation is seen as unreliable, its perceived lack of reliability harms its ability to conduct business with other states. If, for example, the U.S. is seen being unreliable with respect to some of its closest allies i.e., Israel (over the bad timing of a housing plan announcement) or toward the United Kingdom (Falklands issue) with both of whom it has enormous shared interests, why should states such as Russia or China with which the U.S. has fewer shared interests go out of their way to accommodate U.S. needs?
No nation is willing to take risks or make sacrifices for another state when that state's willingness to reciprocate is called into question, as would happen when such states act unreliably toward their closest allies. When such a state is unreliable with respect to countries with which it has only peripheral interests, the fallout is minimal. But when it is seen as unreliable toward close allies with whom it has numerous important shared interests, that situation raises red flags.
You know, in ancient Rome, a politician was considered honest if, when bought, he stayed bought. Israel has been bought, and should remember that.
Countries aren't bought. Any state that views foreign aid as "buying" the loyalty of another sovereign state, much less at the expense of the recipient's own key interests, lacks a fundamental understanding of foreign policy. Such a state is bound to be disappointed and surprised time and again when the sovereign state refuses to capitulate on its own critical interests. Such a state is bound to wind up wasting money and finding it difficult to gain the cooperation of other states who seek to minimize risks by maintaining an arms-length relationship.