Could be NIH syndrome. Could be that they have so many AR-15s/XM16s/XM16E1s/M16s/M16A1s/whatever that they never felt a need to manufacture their own. The IDF may feel that a new rifle had to have been developed to deal specifically with Israel's unique strategic situation. Plus they have IWI/IMI already making guns for the export market. Maybe because they're afraid that making an unlicensed copy (like 99% of the US domestic market for ARs) might chap Congress and making a licensed copy might run into issues with paying the US during another arms embargo. But I don't know.
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