Israel seeks $5b US loan guarantees for advanced weaponry - report

US "Defense News" says Israel will procure V-22 Ospreys and other advanced US weaponry with the funds.

Israel's Defense Ministry will ask the US to guarantee $5 billion in bridge loans that Israel plans taking from US commercial banks to finance procurement of advanced weapons systems that the Obama administration is offering Israel including the Osprey aircraft-helicopter and smart munitions. In the long term procurement will be financed by US military aid, and the loans will bridge the intermediary period in which annual US military aid to Israel is $3.1 billion not enough to finance the new weaponry, US "Defense News" reports.

One senior US source told the weekly magazine that approving the guarantees would not be dependent on Israeli concessions in the peace process with the Palestinians. The US would see such approval as a confidence building measure. "There won't be conditions but there will be expectations," the source said.

US Defense Secretary Chuck Hagel said during his visit to Israel in April that Washington, "would be prepared to put at Israel's disposal the new advanced military capabilities to strengthen it qualitative advantage over its military enemies."

Immediately after this announcement, Pentagon sources expressed annoyance over the administration's decision to prematurely make public the planned procurements. Sources said then that there had been no talks between the US and Israel on costs, quantities, payment conditions and delivery dates.

But in the months that have since past Israel's Defense Ministry has intensified its efforts to obtain US guarantees for bridge loans and both Israeli and US sources say that the initial response from the relevant US authorities should be received no later than the summer, "Defense News" reports.

Defense Minister Moshe Yaalon pushed the subject at meetings on Capitol Hill with US legislators and US Jewish leaders on June 13, the magazine adds. The following day Yaalon flew with Hagel in the Osprey V-22. The two ministers discussed how the plane and other advanced US weapons systems can strengthen Israel's military capability. Final details about the deal which is taking shape will be thrashed out by lower level officials in the coming weeks.

Published by Globes [online], Israel business news - www.globes-online.com - on June 18, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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