To: JDN who wrote (694101 ) 7/27/2005 9:12:56 AM From: DuckTapeSunroof Respond to of 769669 U.S.-Israel tensions rise over China arms sale (US restricts arms transfers to Israel.) Wed Jul 27, 5:12 AM ETnews.yahoo.com Defense Minister Shaul Mofaz has canceled a trip to Washington because of a row with the United States over Israeli arms sales to China, the newspaper Haaretz said on Wednesday. Washington, Israel's closest ally and provider of $2 billion in annual defense aid, was still restricting arms deals with Israel in the dispute. The United States demands Israel adhere to U.S. regulations. Asked about the report, an Israeli Defense Ministry spokesman said: "The ... ministry is continuing its informative and discreet dialogue with the United States with the hope to end the negotiation soon." Washington, a long-time partner in Israeli weapons sales, began freezing mutual security projects and delivery of defense equipment to the Jewish state last month following the arms deal with China. Washington is concerned Israel's sales of Harpy unmanned attack drones and other technology to China could tilt the balance of power and boost China's military strength, which could threaten Taiwan. Israeli Foreign Minister Silvan Shalom publicly apologized to Washington in June over the arms to China, saying "things were done that were not acceptable to the Americans" and insisting Israel meant no harm to U.S. interests. Haaretz said that since the restrictions were applied, Israel had not complied with a U.S. demand to ensure they did not go against U.S. policy. The United States wants Israel's parliament to pass a bill within 18 months that would tighten its monitoring of military exports, as well as an apology from Mofaz, the newspaper said. Mofaz's trip had been expected in the first half of August. Israeli security officials have said U.S. restrictions could hinder its future sales of arms to other countries. Israel's embassy in Washington said last month that U.S. and Israeli negotiators were working on a pact to give the United States more say over Israeli arms sales to China by bolstering "coordination and transparency between the two governments." Washington torpedoed Israel's multibillion-dollar sale of Phalcon strategic airborne radar systems to China in 2000, citing fears it could upset the regional balance of power. Copyright © 2005 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. Copyright © 2005 Yahoo! Inc. All rights reserved.