Washington eyes big arm sales to Israel, Egypt*

By Jim Wolf
Reuters
Friday, August 24, 2007; 5:28 PM

WASHINGTON (Reuters) - The Defense Department said Friday it was
proposing to sell Israel advanced missiles and aviation fuel worth up to
$642 million and tank kits to Egypt worth up to $847 million.

Israel has requested as many as 200 Advanced Medium Range Air-to-Air
missiles manufactured by Raytheon Co., the Pentagon's Defense Security
Cooperation Agency told Congress.

Israel is also interested in up to 30 Harpoon anti-ship missiles built
by Boeing Co. and 500 AIM-9M Sidewinder short-range air-to-air missiles
built by Raytheon, the notice said.

Taken together, the cost of the three missile packages could be as high
as $334 million if all options are exercised.

In addition, Israel is seeking up to 90 million gallons of JP-8 aviation
fuel and 42 million gallons of diesel fuel at an estimated combined cost
of $308 million, the defense agency said.

The proposed sale of the aviation fuel will enable Israel, the closest
U.S. Mideast ally, to maintain its aircrafts' operational capabilities,
the agency said.

It said Egypt was seeking up to 125 MIA1 Abrams tank kits, including
thermal viewers, firepower enhancements and armor upgrades, potentially
worth up to $847 million.

The proposed sale would boost the output of an Abrams tank co-production
program, started in 1988, from its current 880 tanks, to 1,005, the
agency said. The prime contractor would be General Dynamics Corp., it said.

The United States has longstanding commitments to Israel and Egypt,
which in 1979 became the first Arab state to make peace with Israel.

Earlier this month, the Bush administration offered Israel a record $30
billion, 10-year military aid package described

as strengthening a regional bulwark against Iran.

The planned U.S. funding increase could finance purchases such as those
now being considered. The notification to Congress of a potential sale
is required by law. It does not mean a sale has been completed.