- The Washington Times - Friday, May 23, 2003

JERUSALEM — Arms sales in Asia last year helped Israeli defense exports reach a record $4.18 billion, making Israel the fifth-largest arms exporter in the world.

India was Israels main customer in the region last year, and it figures to be again this year after reports of a decision by Washington to drop its objections to the sale of Israels Phalcon airborne early-warning system to New Delhi.

The United States demanded last year that Israel freeze the $1 billion deal to avoid exacerbating tensions between India and Pakistan. According to the Tel Aviv daily Haaretz, Washington has decided that the sale would not undermine its efforts to maintain a stable balance of power in the region.

Israel was forced by Washington to rescind a similar deal to sell the Phalcon system to China three years ago, causing serious tension between Jerusalem and Beijing. That ban has not been rescinded.

The system involves an advanced Israeli radar system mounted on a Russian-made cargo plane.

The White House is reported to be thinking of lifting its objections to the sale by Israel of its Arrow antimissile system, which was developed with U.S. financing. India is interested in purchasing the system.

Israel deployed the Arrow operationally for the first time in the Iraq war, but no missiles were fired at it by Saddam Husseins regime.

Israels arms exports last year were nearly 70 percent higher than the previous year, when sales totaled $2.5 billion.

The defense ministry generally guards the identities of the countries acquiring weapons systems, but it acknowledges that in the past two years the Indian army has become one of the largest customers for Israeli military equipment and technology.

A Muslim-majority country, Turkey, was another major customer, signing a $700 million deal with Israel Military Industries for the refitting and upgrading of 170 tanks.

Only the United States, European Union, Russia and Japan have larger arms exports than Israel. While the other countries generally sell military platforms — tanks, planes, ships — Israels specialty is electronic systems and high-tech military equipment.

The extent of Israels defense industry is a reflection of its geopolitical situation as a country of 6 million surrounded by a hostile Arab world many times its size.

Very little of its high-tech capacity is relevant in the guerrilla-based insurgency that Palestinians have been waging in for the past 2 1/2 years.

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