UPDATE 1-Israel: US co-production of rocket shield not option 'right now'
* U.S. House has sought possible team-up
* Israel ready to give U.S. Iron Dome know-how for own use
* System played critical role during Gaza fighting
By Jim Wolf
WASHINGTON, Nov 29 (Reuters) - Israel has agreed to give the United States the know-how needed to produce interceptors used by its vaunted Iron Dome rocket shield, but it is not interested in any proposed co-production yet, an Israeli official told Reuters on Thursday.
Using radar-guided interceptor missiles, the Iron Dome system shot down 421 of some 1,500 rockets launched from the Gaza Strip between Nov. 14 and an Egyptian-brokered truce on Nov. 21, according to the Israeli military.
The Iron Dome system is designed to engage only rockets headed for populated areas, often firing its Tamir interceptor in pairs.
Co-production is not an option "right now" because of a need for full-tilt output of the so-called Tamir interceptor for short-range rocket and mortar threats from Iranian-backed Hamas and Hezbollah militants in Gaza and southern Lebanon, said the Israeli official, who was not authorized to be named.
Israel fears that introducing a new supply line could interfere with its target for stockpiled missiles in case of renewed fighting, but it is open to reconsidering that eventually if the United States wishes to do so, the official said.
The United States has provided hundreds of millions of dollars to assist Israeli or joint U.S.-Israeli missile defense programs such as Iron Dome and others known as Arrow and David's Sling. Iron Dome was developed by Israel on its own.
The U.S. assistance for building a tiered Israeli missile shield is in addition to a 10-year, $30 billion military aid package agreed to by former President George W. Bush in 2007.
The Pentagon has not shown great interest in acquiring Iron Dome technology. But it has been pushed to do so by the House of Representatives' Armed Services Committee. The committee called this year for the Pentagon's Missile Defense Agency to "explore any opportunity to enter into co-production," in light of significant U.S. funding of the system, even though the United States has no rights to the Israeli technology involved.
In its version of a defense policy bill passed on May 27, the House voted to authorize up to $680 million in additional funding for Iron Dome production from fiscal 2012 to 2015. If enacted, that would bring U.S. funding since 2011 to nearly $900 million to help Israel buy more batteries.
U.S. Defense Secretary Leon Panetta, speaking at a Pentagon news conference on Thursday with his Israeli counterpart, Ehud Barak, hailed Iron Dome's overall success rate in the eight-day Gaza fighting, which he put at roughly 85 percent.
Asked if the U.S. Army might be given a green light to acquire the system, Panetta said that every proposed new program must be looked at for cost-effectivenss in the Pentagon's new tight-budget era.
"And that almost automatically means that we better look at all options before we come down and make a final decision" on armed services' requests for the coming fiscal year, he said.
'POSSIBLE OPPORTUNITIES' FOR CO-PRODUCTION
A Pentagon spokeswoman, Army Lieutenant Colonel Elizabeth Robbins, told Reuters earlier on Thursday the U.S. Defense Department saw "possible opportunities" for Iron Dome co-production.
The United States and Israel have agreed to share "technical data rights" that would be necessary, she added.
"What data rights will be acquired by the U.S. is a matter of continued discussion," Robbins said in an emailed reply.
The Israeli official said negotiations would have to take place on protecting Israel's intellectual property in case of future exports to a third country. Israel would provide the United States Iron Dome know-how for its own potential use in gratitude for U.S. funding, the official said.
Some experts have suggested the United States might eventually seek such technology to protect zones in combat situations like Afghanistan. Separately, Israel reportedly has made efforts to export Iron Dome to countries in Asia, including Singapore.
Raytheon Co, the world's biggest missile maker, said in a statement to Reuters in May that it would welcome an opportunity to partner with Israel's state-owned Rafael Advanced Defense Systems Ltd for co-production of the Iron Dome system in the United States.
Waltham, Massachusetts-headquartered Raytheon is already co-producing David's Sling, a costlier and more powerful interceptor system, with Rafael. A spokeswoman for Raytheon's Missile Systems business unit, Heather Uberuaga, said on Wednesday the company was not publicly discussing either system for now.
The United States in July provided $70 million in its latest installment of aid to fund Israeli procurement of Iron Dome batteries. The system's interceptions of Palestinian rockets during the eight days of Gaza fighting cost $25 million to $30 million, the Israeli government said last week.
Barak, who has announced his intention to retire from public life, echoed Panetta at the news conference, saying U.S.-Israeli security and intelligence relationships had never been so close as they were now.
Referring to Israeli plans to buy more Iron Dome units, he told Panetta, "We highly appreciate your plans to help us in the future on the same issue, because the needs are much larger than what we have right now, and we are determined to complete the system."