While the United States is a major supplier of weapons to Israel (nearly half a billion dollars worth a year), there are many other nations that also supply weapons and ammunition to Israel. Most of these other nations supply small quantities, worth less than $10 million a year. During the last five years, a major supplier, among these minor players, was Serbia, which shipped up to $8.6 million worth of ammunition, mostly 5.56mm, one year. This was needed to rebuild Israeli stocks. That's because five years ago, after the U.S. invaded Iraq, American troops suddenly needed much larger quantities of small arms ammo.
Early on, the U.S. Army had a lot of trouble getting enough 5.56mm ammunition for combat operations in Iraq and Afghanistan, as well as increased training with weapons for troops headed there. More ominous was the need to maintain a "war reserve" of billions of bullets for wars that have not broken out. The one 5.56mm ammo plant the government used (the largest one in the world, in Lake City, Missouri) could produce a maximum of 1.2 billion rounds of 5.6mm ammo a year, and was already operating 24/7. But the army wanted to have the ability to get 3.2 billion rounds a year for surge situations (like a war.) To get the extra ammo, the army bought from other American and foreign manufacturers. One of the major overseas suppliers was Israel Military Industries Ltd. (for 70 million rounds in 2004 alone). There are over a dozen major manufacturers of 5.56mm ammunition worldwide, and the army had no problem getting what they wanted in short order. But Israel shipped so much 5.56mm ammo that they had to turn to other suppliers to keep their own war reserves topped off.
During World War II, sixteen different companies supplied small arms ammunition for the United States, although in that war, there were eight times as many divisions to be supplied. But the U.S. demand for billions of rounds of 5.56mm ammo after 2003, caused major shifts in the usual patterns of who sold to who, at least for a few years.