Israel bows to U.S. over arms exports - newspaper
JERUSALEM (Reuters) - Israel has bowed to U.S. pressure to cancel an arms deal with China and will impose tighter controls on its weapons exports in general, Israel's Haaretz newspaper reported on Sunday.
The dispute with the United States centres on Israel's sale of Harpy attack drones and other advanced technology to China which the Pentagon fears could tilt the balance of power and make it difficult to defend Taiwan.
Agreeing to U.S. demands, Israel will not return Harpy spare parts that China sent to their Israeli manufacturer for repairs, Haaretz said.
Israel, the newspaper said, also accepted a U.S. demand to implement the 34-nation Wassenaar Arrangement on export controls for conventional arms and dual-use goods and technologies.
Prime Minister Ariel Sharon and Defence Minister Shaul Mofaz made the decisions ahead of a visit this week to Washington by an Israeli delegation that will negotiate a memorandum of understanding on Israeli weapons exports, Haaretz reported.
Asked about the report, the Israeli Defence Ministry said only that "proposals and agreements will be discussed within the framework of the on-going discussions" with the United States".
A spokesman for Sharon declined to comment.
Asked about the report, Vice Premier Shimon Peres told reporters: "It is not an American demand. It is a way to regulate the sale of arms so that no damage would be done to one of the two countries."
Last week, Foreign Minister Silvan Shalom publicly apologised to Washington over arms exports to China, saying "things were done that were not acceptable to the Americans" and insisting Israel had not meant to harm U.S. interests.
Haaretz said China would likely seek compensation from Israel over its failure to return the attack drone spare parts and avoid future weapons deals with the Jewish state.
Washington torpedoed Israel's multi-billion dollar sale of Phalcon strategic airborne radar systems to China in 2000, citing concerns it could upset the regional balance of power.
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