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VOICE OF AMERICA
SLUG: 2-314335 Israel-China
DATE:
NOTE NUMBER:

DATE=3/21/2004

TYPE=CORRESPONDENT REPORT

TITLE=ISRAEL/CHINA (L-ONLY)

NUMBER=2-314335

BYLINE=ROSS DUNN

DATELINE=JERUSALEM

CONTENT=

VOICED AT:

INTRO: A high-level Israeli delegation has flown to China for talks on rebuilding military ties between the two countries. The discussions are the first in more than three years, after Israel canceled the planned sale of spy planes to Beijing in the face pressure from the United States. Ross Dunn reports from Jerusalem.

TEXT: The head of the Israeli Defense Ministry, General Amos Yaron, who is leading the delegation to China, is accompanied by top officials in the department's export division.

The Defense Ministry described the talks as a confidence-building measure after the United States demanded Israel call off its one-point-two billion-dollar deal to sell three Phalcon planes to Beijing in July 2000.

The aircraft feature sophisticated Israeli surveillance equipment mounted on Russian cargo aircraft. The planes were designed to provide advanced warnings of an enemy attack.

This year Israel reached an agreement to sell the same aircraft to India, with the support of the United States.

But the U-S administration said it opposed the planes being sold to China for fear this would give Beijing a strategic edge over Taiwan. It asked Israel to cancel the sale.

China demanded compensation equal to the agreed price, but after lengthy negotiations it accepted that Israel would pay 350-million dollars.

The cancellation was seen as a major setback to Israel's efforts to build a substantial trade in arms with Beijing.

From the early 1970s until 1992, when the two nations established diplomatic relations, it is estimated that Israel sold up to four-billion dollars' worth of military equipment to China.

Israeli Defense officials say China has shown a willingness to renew its military ties with the Jewish state, but the two countries are proceeding cautiously.

The officials say Israel will never again take the risk of proposing a sale of military equipment to China if it were to be seen as posing a strategic threat to United States interests. (Signed)

NEB/RD/ALW/MEM



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