Russia told Israel it would cancel the sale of anti-aircraft missiles to Iran in return for access to advanced Israeli drone technology, according to a U.S. diplomatic cable provided to Le Monde by WikiLeaks.org.

Russia also offered $1 billion for the technology, Israeli Defense Ministry official Amos Gilad said during a Dec. 1, 2009, meeting with U.S. Undersecretary of State Ellen Tauscher, Paris-based Le Monde reported today, citing the cable sent by an unidentified U.S. diplomat.

Israel declined to provide Russia with its latest unmanned aircraft, saying it was concerned the technology would end up in Chinese hands, Gilad said, according to Le Monde. Russia in September canceled an $800 million contract to supply an S-300 air-defense battery to Iran after the United Nations Security Council imposed new sanctions against the Persian Gulf nation.

WikiLeaks, a nonprofit group that releases information the government wants to keep confidential, has begun posting on its website what it says are more than 250,000 U.S. State Department documents written from December 1966 to February 2010. Department spokeswoman Nicole Thompson declined to confirm information in the documents, saying it is the agency’s policy not to comment on specific leaked materials.

Mark Regev, a spokesman for Israeli Prime Minister Benjamin Netanyahu, declined to comment when asked about the reported Russian offer. Netanyahu said at a news conference in Tel Aviv today that Israel “has not been damaged at all” by the material released by WikiLeaks.

Russian President Dmitry Medvedev’s administration found “nothing interesting” in the cables published by WikiLeaks, Interfax cited Medvedev spokeswoman Natalya Timakova as saying. Igor Yevdokimov at the Foreign Ministry’s press service said he couldn’t comment on the WikiLeaks documents before tomorrow.

UN Sanctions

The Kremlin said in June that the S-300s were covered by the new UN sanctions, which banned sales of weaponry including fighter jets, attack helicopters, warships or missiles.

Delivery of the S-300 missiles would “represent a significant increase in the defense capability of Iranian forces,” U.S. Army General David Petraeus told the Senate Armed Services Committee on March 16, when he was commander of all U.S. forces in the Middle East and Central Asia.

Israeli Defense Minister Ehud Barak signed a defense cooperation agreement with Russia on Sept. 6. Prime Minister Vladimir Putin said at the time that Russia had already bought Israeli drones and it was interested in equipping the unmanned planes with Russian laser technology.

WikiLeaks provided advance access to the documents to news organizations including Le Monde, The New York Times, the London-based Guardian, Madrid-based El Pais and Hamburg-based Der Spiegel.

http://www.bloomberg.com/news/2010-11-29/russia-sought-israeli-drone-t...

17 Oct 2010

TEL AVIV - In the largest-ever defense trade deal between Russia and Israel, state-owned Israel Aerospace Industries (IAI) will provide UAVs, supporting technology and production know-how in a multiyear contract estimated by both sides to be worth $400 million.

Signed Oct. 12, the deal begins by sending to Russia kits for final assembly of medium-range Searcher and short-range I-Bird UAVs, along with production infrastructure. Within three years, Russia aims to develop full indigenous production capabilities to make UAVs for its own forces and export customers.

"The main aim of our project is to develop a center of competence of world-class unmanned vehicles manufactured in Russia," said Andrey Reus, director-general of JSC OPK Oboronprom, a group of state-affiliated companies that includes the Khazan helicopter production facility and the MC Joint Engine-Building Corporation.

"In cooperation with one of the acknowledged leaders in this field - IAI - we expect to become a true player in this market within the shortest possible time," Reus said. "Within the framework of this mutually advantageous cooperation with Israeli partners, we shall be able to get access to new technological decisions and modern [production] concepts."

He said the company would gradually replace imported components with domestic ones.

Reus and IAI Chief Executive Itzhak Nissan signed the deal in Israel, with visiting Russian Industry and Trade Minister Viktor Khristenko serving as Moscow's senior government witness.

The deal follows a broad-based military cooperation agreement signed in Moscow last month between Russian Defense Minister Anatoly Serdyukov and his Israeli counterpart, Ehud Barak. Russian analysts said at the time that the agreement would allow Russia to tap further into Israel's defense technology in exchange for a promise of not supplying arms to Israel's foes in the Middle East.

The UAV deal also is a follow-on to a 2008 sale of Searcher UAVs. Worth an estimated $50 million, the sale provoked concern in Washington and within some Israeli government agencies about the qualitative upgrade to Russian combat capabilities and their eventual export to countries that threaten U.S. and Israeli interests.

At the time, MoD officials argued that the Searcher has been operational for nearly two decades, and that the benefits of cooperation with Moscow far outweighed the risk associated with transfer of Searcher-related systems and know-how.

"The Israelis have their own legitimate concerns, as do we with regard to advanced technology sales to the Russians," a Pentagon official said earlier this year. "Neither of our countries would want to see Israeli technology come back and bite us."

In her visit here in June, Michele Flournoy, U.S. defense undersecretary for policy, said Israel has been "very transparent" with Washington about its desire to boost cooperation with Moscow.

"I'm not aware of any case where they wanted to sell something that we would object to," Flournoy told reporters here.

The subject is expected to be a prominent agenda item when U.S. and Israeli officials meet next month in Washington for semi- annual political-military talks, said sources from both sides.

In an Oct. 13 notification to the Tel Aviv Stock Exchange, IAI reported that it would receive some 70 percent of the payment up front, with the balance to be made in installments as the company delivers products and services. To offset the risk of political, business-oriented or other upsets to the planned agreement, IAI will provide bank guarantees against initial payments.

"Amounts of guarantees will decrease as deliveries are fulfilled, in accordance with the financial value of each delivery," the company stated in its financial notice.

In a conference late last year, IAI's chief executive said the company extended an aggregate of some $2.5 billion in bank guarantees on customer advances to offset self-incurred or externally imposed risks.

"It's a never-ending circle," Nissan told conference participants. "The banks won't give you [guarantees] if you don't show your ability to deliver … and you can't secure customers without them."

The most egregious example of politically generated, externally imposed risks of contract liability involved the 2000 termination of a $1 billion-plus Israeli deal to provide Phalcon aerial early warning aircraft to China. Washington pressed hard on the Israeli government to back away on the deal, fearing the advanced capabilities would dilute American military superiority in the Pacific theater.

As a result, Israel was forced to pay termination liability fees and added compensation, and is still working - in consultation with Washington - to repair frayed ties with Beijing.

As for expanded ties with Russia, beyond the initial two UAVs, IAI hopes to interest Moscow in high-technology fields unlikely to arouse suspicion in Washington.

In an Oct. 13 news release, Nissan noted, "We hope to expand our joint relationship to include additional areas such as the commercial market and the green energy sector."

But a Russian diplomat said Moscow would eventually like to be able to design as well as produce frontline unmanned systems; a capability, he said, that was found lacking during the 2006 war with Georgia. The diplomat noted that as a condition for final government authorization, Moscow expects Israel to maintain its freeze on export licenses to Georgia, and to continue to consult with Moscow on arms sales to former satellite states such as Khazakhstan.

As for Israel's geopolitical interests, a defense official here said that if properly executed, this deal and future cooperation in the high-tech and military sphere are expected to slow and perhaps even halt controversial frontline Russian-made weaponry to Syria, Iran and other aggressor states.

But Amir Oren, veteran defense analyst at Israel's daily Ha'aretz newspaper, said this thinking is delusional.

"It's obvious that the Russians, just like the Soviets before them, will operate out of cold, calculated interests," Oren said. "If they want to sell missiles to Iran, Syria or whomever, they will do so. Israeli consideration will always be secondary to their overall calculus."

http://www.defensenews.com/story.php?i=4921326

Submitted by andie531 on Sun, 2010-12-05 19:11

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