Israeli defense company Elbit Systems has signed a joint venture agreement with Serbian state-owned company Yugoimport-SDPR to establish a joint drone production site in Serbia, a move driven by surging European demand for loitering weapon systems in the wake of the wars in Ukraine and Israel.
Serbian President Aleksandar Vučić revealed plans in March 2026 for a new drone factory set to produce what he described as “the most serious UAVs in the world,” with the facility potentially becoming operational by April 2026. Israeli sources indicate the site, located in Šimanovci, will manufacture short-range strike drones for attack missions and long-range UAVs capable of operating at altitudes up to 6 km.This will surpass Serbia’s existing Pegasus combat-reconnaissance drone. Serbia had previously purchased the Elbit Hermes-900 UAV.
Sources indicate Serbian interest centers on the Elbit SkyStriker loitering munition, a system Elbit announced in an undisclosed European deal three years ago. SkyStriker is a fully autonomous loitering munition capable of locating, acquiring and striking operator-designated targets using a warhead installed inside the fuselage. Its electric propulsion delivers a low acoustic signature for covert low-altitude operations. The system is designed for long-range, precise tactical strikes supporting maneuverable troops and Special Forces. The war in Ukraine has significantly accelerated European interest in the SkyStriker platform.