Chinese Spy Plane Deal

Israel Won't Cancel Spy Plane Deal

Associated Press

JERUSALEM (AP) - Visiting Chinese president Jiang Zemin has been given assurances that Israel will not cancel the sale of an early warning aircraft to China despite American pressure.

In a meeting with Jiang, Prime Minister Ehud Barak said Israel values the Chinese market too much to risk it by backing out of a signed contract.

Jiang continues his six-day official visit to Israel today, meeting with President Ezer Weizman at the Dead Sea and touring the nearby desert.

Israel and China signed a contract three years ago for an Israeli-made PHALCON radar system mounted on a Russian Ilyushin airplane. In recent months the United States has been pressing Israel to cancel the deal, fearing it would upset the delicate balance of power between China and Taiwan, which Beijing regards as a renegade province.

PHALCON is an airborne radar system that, like the American-made AWACS system, gives early warning of approaching attack aircraft.

The speaker of Israel's parliament, Avraham Burg, backed U.S. criticism of the deal, saying Israel was wrongly trying to win friends by selling them weapons.

``It is wrong that Israel bases its relationship with some of the regions of this world on arms deals and arms trade,'' Burg said after meeting with Jiang.

Israeli arms expert Yiftah Shapir said a single radar plane would have no effect on the military balance between Taiwan and China. He said political and business interests are behind American objections to the deal.

The United States is Israel's main military and political backer, and gives Israel about $4 billion in military and economic aid annually.

Israel's defense industry exports close to 80 percent of the types of weapons it develops, subject to restrictions over reselling American weapons systems. Israel says the PHALCON has no American technology, although it is apparently based in part on U.S. research.

For Israel, the plane deal has become an issue of foreign credibility and local economics. Shapir said if Israel cancels a contact signed three years ago, China and other clients would hesitate to buy Israeli products.

China is a potentially lucrative market for Israel's struggling weapons industry, and Israel has also been trying to develop markets in China in other economic spheres including agriculture and technology. Israel fears that if the plane sale is canceled, China might cool to the idea of doing business with Israeli companies.

The PHALCON deal could be worth $2 billion if China decides to buy additional planes. Unemployment in Israel is high, and Barak is under pressure to deliver on a campaign promise to turn Israel's stagnant economy around and create 300,000 new jobs.

Jiang, who is making the first official visit by a Chinese president to Israel, tours agricultural projects in desert areas today. He said China is interested in using Israeli irrigation technology to help develop farmland in the arid western part of his country. Jiang leaves on Monday.