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DATE=6/30/2000 TYPE=CORRESPONDENT REPORT TITLE=ISRAEL / U-S / CHINA (L-ONLY) NUMBER=2-263929 BYLINE=MEREDITH BUEL DATELINE=JERUSALEM CONTENT= VOICED AT: INTRO: Top Israeli officials are indicating the controversial sale of an advanced radar plane to China may be cancelled, after strong protests about the arms deal from the United States. V-O-A Correspondent Meredith Buel has details from Jerusalem. TEXT: Israeli Cabinet minister Haim Ramon, a close confidant of Prime Minister Ehud Barak, is indicating Israel should cancel the sale of an advanced radar plane to China in order to retain its good relations with the United States. Mr. Ramon says Israel needs to choose between the interests of its military industry and its long- standing links to the United States. The Phalcon early-warning system is being manufactured by Israel under a military contract signed with Beijing. The deal is worth 250-million dollars per plane and has a potential price tag of billions of dollars. The U-S Defense Department has repeatedly expressed concern that the plane could be used against American aircraft if a war breaks out in the Taiwan Strait. Earlier this week, U-S Secretary of State Madeleine Albright urged top Israeli officials to scrap the deal. /// ALBRIGHT ACT /// We have made quite clear our concern about the potential Phalcon sale. At the same time, we have also made very clear over the years that the security of Israel is of major importance to the United States. // OPT // We have made clear our constant statements about making sure that Israel has a qualitative edge, and our security relationship is a very good one. As far as the sale itself is concerned, we are involved in a serious process with Israel to deal with the issue. // END OPT // /// END ACT /// President Clinton has also expressed his concern about the weapons deal. Members of the U-S Congress are calling on Israel to terminate the sale, or risk losing hundreds of millions of dollars in foreign aid. A Foreign Ministry spokesman in Beijing said this week the United States should not interfere in the development of relations between Israel and China. The contract with China has opened the first major diplomatic disagreement between the Clinton administration and Prime Minister Barak. /// OPT /// The rift comes during a critical time in the Middle East peace process. Israel and the United States are trying to convince the Palestinians to attend a summit, while Mr. Barak's government is asking for billions of dollars to help pay for security arrangements after any peace accord is signed. Israeli Foreign Minister David Levy, speaking through a translator, says Israel will do nothing that harms the interests of the United States. /// OPT LEVY/TRANSLATOR ACT /// It is clear, and we say this clearly without hesitation, that Israel, as a friend, and perhaps I can say the closest friend of the United States, will not do anything - anything -- that would harm the national interests of the United States, or especially, the security of the United States in any way. We hope that in the few days to come we will find the solution that will be of satisfaction to both sides. But just the feeling itself that Israel, in some way or another, might harm the United States -- that is a serious matter, and that is what must be removed as soon as possible. /// END ACT /// /// END OPT /// Israel's Deputy Defense Minister, Ephraim Sneh, is expected to lead a delegation to Washington next month in an attempt to defuse the controversy over the weapons sale to China. Until the situation is resolved, as the daily Ha'aretz newspaper said, "the Phalcon will continue to be a sword of Damocles hanging over Israel's head." (Signed) NEB/MB/GE/WTW 30-Jun-2000 08:52 AM EDT (30-Jun-2000 1252 UTC) NNNN Source: Voice of America .