U.S. announces major Middle East arms package

WASHINGTON (Reuters) - The United States on Monday announced military aid packages worth more than $43 billion for Egypt, Israel, Saudi Arabia and other Gulf states in an effort to bolster Mideast allies against Iran and others.

The United States plans to offer a $13 billion package for Egypt over 10 years and a $30 billion package for Israel over the same period, increases over previous military funding, as well as unspecified defense aid to Saudi Arabia and Gulf states, said U.S. Secretary of State Condoleezza Rice.

The Saudi package is expected to upgrade the country's missile defenses and air force and increase its naval capabilities, a defense official told Reuters on Saturday. The package for Saudi Arabia and the other Gulf countries could reach $20 billion over 10 years, the official said.

The proposed aid packages still have to be approved by Congress and there is expected to be opposition by some lawmakers, particularly over assistance to Saudi Arabia, which is accused of not being helpful in Iraq.

Rice made the announcement hours before leaving with Defense Secretary Robert Gates for a rare joint trip to Egypt and Saudi Arabia where they are seeking more Arab help in stabilizing Iraq.

"This effort will help bolster forces of moderation and support a broader strategy to counter the negative influences of al Qaeda, Hezbollah, Syria, and Iran," said Rice in a statement announcing the defense agreements.

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.

IRAN CRITICAL

But Iran accused the United States on Monday of seeking to create fear and cause divisions in the Middle East by announcing the major package of arms deals.

"America has always considered one policy in this region and that is creating fear and concerns in the countries of the region and trying to harm the good relations between these countries," Iran foreign ministry spokesman Mohammad Ali Hosseini told a regular press briefing.

U.S. Under Secretary of State Nicholas Burns characterized the deals as a continuation of existing policy.

"It's not as if we're introducing some new element in the region," Burns said in a conference call. "Iran is a factor in this but it wasn't the overriding factor."

Burns said he saw no conflict between the aid packages to Saudi Arabia and Egypt, whose governments have a long record of human-rights abuses, and the Bush administration's long-term goal of promoting democracy in the region.

'CONFRONTING THE THREAT OF RADICALISM'

Rice said the Bush administration was starting discussions with Egypt for the $13 billion military assistance deal which would strengthen Egypt's ability to "address shared strategic goals."

"Further modernizing the Egyptian and Saudi Armed Forces and increasing interoperability will bolster our partners' resolve in confronting the threat of radicalism and cement their respective roles as regional leaders in the quest for Middle East peace and in ensuring Lebanon's freedom and independence," Rice said.

The aid package to Israel steps up annual military support to about $3 billion each year from the $2.4 billion Israel now receives annually under a 10-year plan negotiated by the Clinton administration in 1998, Burns said.

Burns planned to travel to Israel next week to conclude the agreement.

Burns said the final amount for the Saudi and Gulf states arms package was still being negotiated, although he expected it to be in the billions. A final package with a firm price tag will be presented to Congress in September, he said.

Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates are also expected to benefit but no details have been given.