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ISRAEL - March 21 - China Arms Ties Haunting US.

The Financial Times says one sensitive issue hovering in the background of Sharon's visit to Washington is that of his country's controversial arms relationship with China. Israel's most recent planned sale of high-tech weaponry to Beijing was the "cause of a rare public spat with the US during the premiership of Ehud Barak". The dispute last year involved Israel's contract to supply Beijing with the Phalcon airborne early warning radar system developed by Elta, a subsidiary of Israel Aircraft Industries. The deal was frozen after a congressional committee protested, amid threats to cut military aid to Israel, that the sale would give China a military edge over Taiwan. Israeli military analysts say that, while Sharon is eager not to revive the dispute, some officials and defence industry executives are smarting over what they regard as US interference in Israel's affairs and still hope the sale will go ahead.

"The project was frozen but not killed", said Gerald Steinberg a Middle East arms expert at Israel's Bar-Ilan University. "Some people in the military industries lobby think they can still salvage it". He said there had already been relatively low-level discussions with Washington since the Phalcon affair over how to handle such deals. "The US would like to be able to give prior approval and Israel wants to limit that. At the same time Israel wants to avoid another (dispute). Barak handled it very badly and Sharon has learned the lesson". Meanwhile Phalcon's manufacturers are focusing on selling a scaled-down version of the radar system, an option being discussed with US officials. Israel is eager to maximise its arms exports, a sector that grew 10% in 2000 to $2.35 bn, with Asia the key market. The Phalcon deal with China would have been worth $1.5 bn over several years. The Phalcon affair and the prospect of future sales of the system, which Sharon was not expected to raise during his Washington visit, have focused attention on a secretive weapons relationship with China that dates back 20 years, long before the two countries established diplomatic relations in 1992. It is a partnership, that has long worried the US Congress, whose concerns involve not only Taiwan but also the possibility that China could leak Israeli high-tech weaponry, much of it funded by the US taxpayer, to states such as Iraq and Iran. Israel itself recognised that risk in 1999, when it raised its concerns that China was transferring missile technology to Iran. Shortly after the Gulf war in 1991, the administration of President George Bush Snr acknowledged it was investigating the possible transfer by Israel of Patriot missile technology to China. US-built Patriot batteries were set up in Israel, amid great fanfare during the war as a defence against Iraqi Scud missile attacks and as a gesture to keep Israel out of the conflict. A report about the same time by the Rand Corporation described Israel as "China's leading foreign supplier of advanced technology" and, in 1999, the congressional Cox committee reported that Israel had offered significant technology co-operation to China in missile and aircraft, including its F-10 fighter. US defence journals reported that the F-10 had the same configuration as Israel's Lavi fighter, a project dropped in 1987 after it had been funded by the US to the tune of some $1.5 bn.

The US official principally responsible for killing the Lavi was Dov Zakheim, a defence department analyst, who concluded that the US would have to provide $16 bn in support over the lifetime of the project. An Orthodox Jew, Zakheim was publicly attacked for appearing to go against the interests of Israel. He maintained that US military aid would be better spent acquiring US fighter technology off the shelf, modernising the Israeli navy or upgrading its ground forces. His arguments eventually persuaded the Knesset to halt expenditure on the project in 1992. The FT added: "Zakheim's experience with the Israelis will no doubt come in useful in his new post". Among Pres. Bush's cabinet appointments, Zakheim has been named under-secretary of defence.
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Publication:APS Diplomat Recorder
Article Type:Brief Article
Geographic Code:1USA
Date:Mar 24, 2001
Words:674
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