August 12, 2007 / 3:45 PM / 11 years ago

U.S. and Israel close gap on defense aid payouts

JERUSALEM (Reuters) - The United States has yielded to some Israeli demands on how new U.S. military aid will be paid out, ending a brief dispute over the issue, an Israeli official involved in the talks said on Sunday.

An Israeli military helicopter and tanks take part in an army drill at the southern Israeli army base of Tzeelim, August 7, 2007. The United States has yielded to some Israeli demands on how new U.S. military aid will be paid out, ending a brief dispute over the issue, an Israeli official involved in the talks said on Sunday. REUTERS/Amir Cohen

With an eye on an ascendant Iran, Washington announced a defense package for its allies in the region on July 30 including stepping up aid to Israel — which now receives $2.4 billion a year — by 25 percent, for a total of $30 billion over the next decade.

The Bush administration wanted to increase the aid by a set amount each year, the Israeli official said, while Israel asked for the new funds to be “front-loaded”, i.e. for a bigger chunk to be paid out in the first years, or spread evenly so the annual sum was $3 billion.

“We reached an agreement that is somewhere in the middle,” the Israeli official said, adding that first payout under the new schedule would be $2.55 billion as proposed by Washington.

“After that, the increases will be steeper, meaning we achieve the $3 billion mark more quickly,” the official said.

U.S. Undersecretary of State Nicholas Burns was expected in Israel last week for the signature of the aid deal but postponed his visit. The State Department said this was a result of scheduling problems.

The Israeli official said Burns was expected to arrive on Wednesday and for the talks to be completed by Thursday.

ARMS UPGRADES

Under the package announced on July 30 and awaiting approval by Congress, Egypt is expected to receive an additional $13 billion in the next decade while Saudi Arabia and other Gulf states could receive arms upgrades worth $20 billion.

Tom Lantos, a U.S. congressional leader, described ratification of the aid increase to Israel as a certainty.

“(It) will receive congressional support and will guarantee, for the next decade, along with Israel’s own determination and military capability, the security of this nation,” he told reporters during a visit to Jerusalem.

“One of the most important aspects of this $30 billion package, unprecedented in scope, is that it will guarantee the continuance of Israel’s qualitative military edge.”

The United States has in the past provided Arab allies with military equipment on a par with that given to Israel. Analysts say one reason for Israel’s perceived advantage in combat is the application of its own technology to the U.S. hardware.

“The argument is that we have the ability to make the most of the equipment, thanks to our add-ons,” retired general Giora Eiland, Israel’s former national security adviser, told Reuters.

Israel, which suffered surprise setbacks in its war with Lebanese Hezbollah guerrillas last year, has been building up its armed forces in case of a flare-up with arch-foe Iran.

Additional reporting by Adam Entous

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