Weapons of Mass Destruction (WMD)

ATE=6/21/2005

TYPE=CORRESPONDENT REPORT

TITLE= ISRAEL / CHINA L-ONLY

NUMBER=2-325411

BYLINE= LARRY JAMES

DATELINE=JERUSALEM

CONTENT=

VOICED AT:

HEADLINE: Chinese Foreign Minister Visits Israel Amid Arms Sales Controversy

INTRO: Israeli officials are playing host to Chinese Foreign Minister Li Zhaoxing on a visit that is being billed as a chance to discuss a wide range of topics from the Middle East peace process to issues of global interest. But, as Larry James reports from Jerusalem, it is Israel's sales of military technology to China that is making the real news because of the strains it has put on ties with its most important ally, the United States.

TEXT: To judge by statements made by Foreign Minister Li and his Israeli counterpart Silvan Shalom during a friendly table tennis match, it would seem nothing is amiss and relations could not be better.

/// SHALOM LI ACT ///

(SHALOM) Its almost impossible to beat him because he's a champion. (But) I do my best. (LI) Friendship comes first. (SHALOM) Oh, that's good. Now I have a chance.

/// END ACT ///

Neither man has had any public comment on an issue that has been in the headlines, namely -- the sale of Israeli military technology to China. The arrangement has caused serious strains in Israel's relationship with Washington.

Over the weekend, Secretary of State Condoleeza Rice was here and addressed the issue very directly in a meeting with reporters following her talks with Israeli officials. She said she has made the American position clear.

/// RICE ACT ///

"I think everybody knows our concerns about arms sales to China, particularly arms sales with countries with which we have strong defense cooperation relationships as we do with Israel."

/// END ACT ///

The dispute stems from the sale of unmanned aircraft technology, originally sold to China by the state-owned Israel Aircraft Industries in the early 1990s. American officials say some of the parts were shipped back to Israel last year for an upgrade.

Israel has said the units were simply undergoing routine maintenance, but Israeli military officials have, nonetheless, stopped work on the aircraft.

According to Israeli media reports, the United States imposed a series of sanctions on the Israeli arms industry in recent months because of it sales to China. Washington has also suspended cooperation on several projects, frozen delivery of some equipment, and is even refusing to answer telephone calls from Israeli defense officials.

Secretary Rice did not say the conflict over the sales of advanced military technology to Beijing has been completely resolved. She suggested Washington has not changed its position but that a resolution to the problem can be found.

/// 2ND RICE ACT ///

"I appreciate that the Israeli government has been working on this issue. I discussed it also with Defense Minister Mofaz last night and I believe that the Israelis now understand our concerns and Im certain that as good partners can, that we can come to some resolution that can allow us to proceed."

/// END ACT ///

Israeli officials have taken great pains to downplay any negative impact from the arms controversy on their country's normally close relations with Washington. But, the arms sales issue is there even though neither Israeli officials nor their Chinese guest are likely to address it publicly during Mr. Li's visit.

The Chinese foreign minister is meeting with Prime Minister Ariel Sharon as well as with the head of the Foreign Affairs and Defense Committee of the Israeli parliament.

Israeli Foreign Minister Shalom visited China in November of last year.

NEB/LDJ/MEM