U.S. plans $7 billion missile-defense sale to UAE

By Jim Wolf

WASHINGTON (Reuters) - The Bush administration is planning to sell the United Arab Emirates an advanced U.S. missile defense system valued at up to $7 billion that could be used to defend against Iran, people who have attended briefings on the matter said on Monday.

The Pentagon is set to notify the U.S. Congress of the proposed sale, which would be the first of the so-called Terminal High Altitude Area Defense, or THAAD, several people familiar with the matter said.

THAAD is built by Lockheed Martin Corp. Raytheon Co supplies the system's radar.

Once notified of such a proposed arms sale by the administration, Congress has 30 days to review it but almost never blocks.

In any case, deployment of the THAAD system is "at least months away" and could take more than a year, said a congressional staff member familiar with the matter.

A production contract for the first two THAAD "fire units" was awarded to Lockheed Martin in late 2006. Delivery of the first such unit to the U.S. military is scheduled during the fiscal year that starts October 1, the company said.

Kenneth Katzman, an expert on the Gulf at the Congressional Research Service, said the UAE has been eager for a "sophisticated antidote" to Iran's missile capabilities.

"The UAE has been concerned for many years about possible retaliation against it for any U.S. or Israeli strike on Iran's nuclear facilities," he said.

For Iran, Katzman added, the UAE could be an attractive target because of its billions of dollars of infrastructure investments. The THAAD system is designed to defend population centers and critical infrastructure among other things.

DEFENSE PLANS

Craig Vanbebber, a Lockheed Martin spokesman, said several countries had shown interest in buying the THAAD system, "with its significant coverage area and tremendous success in recent testing."

"Lockheed Martin anticipates a strong future for THAAD in the international marketplace," he said.

THAAD is the first system designed to defend against short- and intermediate-range ballistic missiles both inside and outside the Earth's atmosphere.

It complements the lower-aimed Patriot missile defense system, "resulting in a layered defense that ensure a very high probability that ballistic missile threats will be destroyed," according to Lockheed Martin.

Several such systems on land, at sea and potentially aloft are being woven into an expanding U.S. shield against missiles that could be tipped with chemical, biological or nuclear warheads.

The proposed $7 billion sale to UAE would include anti-missile interceptors, launchers, fire control and communications systems, the radar and training, among other things, a congressional staff member said. It was not immediately clear whether the UAE was also seeking the Patriot missile defense system.

The sale has been the subject of extensive discussions among U.S. decisionmakers, including over how it would fit into the U.S. Central Command's integrated air-defense plans for the Gulf and the security of the technology, the congressional staff member said.

(Editing by Mohammad Zargham)