U.S. readying Saudi arms deal, official confirms

WASHINGTON (Reuters) - The Bush administration is preparing a package of arms sales to Saudi Arabia and other Gulf states that could be worth some $20 billion over the next 10 years, a senior U.S. defense official said on Saturday.

The official largely confirmed reports of the deal in The New York Times and Washington Post ahead of a joint trip to Saudi Arabia and other Middle Eastern countries by Secretary of State Condoleezza Rice and Defense Secretary Robert Gates.

The official, speaking on condition of anonymity as the deal has not yet been officially announced or completed, said the administration hoped to present the package to the U.S. Congress for approval in the fall.

Washington is striving to assure Gulf allies, worried by the growing strength of Iran and war in Iraq, that the United States is committed to the region and will stand by them, with arms sales part of that process, U.S. officials say.

The United States has sought to allay Israeli concerns about the forthcoming package. The senior U.S. defense official said Washington was working on a military assistance deal for Israel expected to top $30 billion during the next decade, a significant increase on current levels.

The Saudi package would upgrade the country's missile defenses and air force and increase its naval capabilities, the official said. It "may make sense" also to provide Saudi Arabia with satellite-guided munitions, the official said.

"None of these things are final proposals by any means," the official said, stressing discussions with the countries involved and members of Congress were still needed.

The package would cover other U.S. allies in the Gulf, the official said. Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates are expected to benefit, the Times and Post said.

The deal was part of long-term U.S. efforts to assist allies rather than a new push to arm them, the official said.

"This isn't an arming of the Middle East," the official said. "This is part of a continual, deliberate program."

The United States also is preparing a package of military assistance worth some $13 billion in the next decade for Egypt, another U.S. ally in the Middle East, a senior State Department official said.

A second senior U.S. defense official, briefing reporters on Friday ahead of next week's trip by Gates and Rice, said no announcement of the Saudi deal was expected during the visit.

Rice and Gates are expected to use the trip to press U.S. Gulf Arab allies to do more stabilize Iraq.

U.S. officials have expressed frustration with Sunni Arab nations such as Saudi Arabia that harbor doubts about Iraq's Shi'ite-led government, seeing it as unable to pacify the country and too close politically to Shi'ite-dominated Iran.

They have urged Saudi Arabia to support Prime Minister Nuri al-Maliki's government and to do more to stop Saudi militants from entering Iraq. They also have expressed concern about Saudi funding for Sunni groups in Iraq.

(Additional reporting by Sue Pleming)