JANUARY/FEBRUARY 1995, Pages 30, 46

Defense and Intelligence

Pentagon Questions Benefits of Israel's U.S.-Funded “Arrow” Project

By Tim Kennedy

John Deutch, the second most powerful man at the Pentagon, has threatened to withhold continued support for the joint U.S.-Israeli "Arrow" anti-missile program unless officials from both countries can produce evidence that the multi-million-dollar effort provides a direct benefit to the United States.

At stake is the $180 million that the Defense Department currently has earmarked through 1999 for "Arrow"-related development spending. This cash grant includes $85 million that Israel says it needs over the next three years to begin full-scale production of the ground-based missile.

Sources tell the Washington Report that Deputy Secretary of Defense Deutch has ordered Lt. Gen. Malcolm O'Neill, director of the Pentagon agency that funds "Arrow," to prove that the U.S. can reap direct technological benefits from a missile that would be used only to defend Israel against ballistic missiles, and that never was intended to see service in any branch of the American military.

The "Arrow" missile program has thus far cost nearly half a billion dollars, with over 70 percent of development money coming from the U.S. Department of Defense. From the beginning, "Arrow" has experienced repeated test failures and other setbacks which delayed its development timetable.

Concerned by chronic problems in the "Arrow" program and by recent corruption scandals that rocked Israel's government-controlled defense industry, Congress recently asked the General Accounting Office (GAO) to examine the cost, schedule and technical risks of the missile program.

The GAO's report, released in August, recommends that U.S. defense dollars earmarked for "Arrow" would be better spent if used for U.S. weapons development programs that directly address American national security needs. Last year, a GAO audit of the "Arrow" program found that the U.S. government failed to monitor how Israel used the money it received for "Arrow," and said that Pentagon program managers "exercised inadequate control" over the highly classified American-made technology used to create the missile.

Doubts about the validity of "Arrow" among senior Pentagon decision-makers reportedly prompted David Ivry, director-general of Israel's Ministry of Defense, to schedule a December meeting with Deutch to present the case for sustaining "Arrow" funding.

Israeli sources told Defense News that Ivry would try to convince Deutch that "Arrow" will lessen the burden on the United States should American forces have to make an emergency deployment to the Middle East of the magnitude of the Gulf war buildup. Additionally, the weekly trade newspaper said Ivry would try to show that "Arrow's" electro-optical technology could be integrated into several missile defense systems currently in development by the U.S. military—notably the U.S. Army's Theater High Altitude Area Defense missile, the 21st-century successor to the "Patriot."

U.S. defense dollars would be better spent for programs that directly address American national security needs.

The recent GAO analysis of the "Arrow" program specifically cites electro-optics as one of the many American "defense articles and technologies provided for the 'Arrow'" which the Israeli manufacturer of the missile now claims are exempt from U.S. export controls because they were invented by Israeli scientists.

The GAO report says Israeli defense industries routinely accept transfers of highly classified military technology from the United States, stamp it "Made in Israel," and incorporate the American technology in sophisticated weapons systems sold to developing countries.

Among its conclusions regarding continued military cooperation with Israel, the GAO says that the Defense Department's "overall management approach to date [regarding Israeli projects] is 'hands off' or 'management by exception,'" and recommends that Israel permit representatives from the Defense Contract Management Agency and various congressional and DOD auditing agencies access to "Arrow" production facilities for the thorough monitoring of U.S. defense articles, technologies and funds.

The GAO also warns that more comprehensive audits of all U.S.-supported Israeli projects "could encourage accountability, and provide assurance that funds are not used to support other Israeli projects."

"We're not proposing that U.S.-funded programs in Israel be singled out in any way," Davi M. Agostino assured the Washington Report. Echoing a conclusion of the GAO report on "Arrow" which she co-authored, Agostino added: "We simply want [the Israelis] to account for how they spend U.S. tax dollars just like all our other partners in foreign militaries do."

Despite Deputy Secretary Deutch's call for a re-assessment of the "Arrow" missile program, many defense insiders doubt whether the Pentagon could end the program, citing the strong support for "Arrow" on Capitol Hill. When the 1995 budget request for the "Arrow" program was sent to Congress last September, the section of the defense appropriations bill which earmarked funds for "Arrow" was approved without a word of debate.

The Near East Report—a weekly newsletter published by the American Israel Public Affairs Committee (AIPAC)—says Senator Daniel Inouye (D-HI), chairman of the Defense Appropriations Committee, was "instrumental" in securing the $62.4 million required to continue "Arrow."

Politically, support for sustaining of "Arrow" is bipartisan. Incoming chairman of the Senate Foreign Relations Committee Jesse Helms (R-NC) has vowed he will not cut the estimated $5 billion in direct and indirect foreign aid the United States provides to Israel.

Helms' promise is echoed by President Bill Clinton. After meeting with Israeli Prime Minister Yitzhak Rabin in Washington in late November, Clinton said he would personally ask Congress to sustain "Arrow."

Dividends for Israel's Arms Industry

A story released recently by Compass news agency reports that "Israel is winning major dividends for its arms industry, the most advanced in the Middle East, from the U.S.-sponsored peace initiative and is likely to gain more before it is all over."

According to Compass, Israeli arms merchants have enjoyed a significant jump in sales to foreign countries since the 1991 Madrid Peace Conference. Compass says Israel's booming defense industry now has strong ties with its industrial counterpart in Germany and France, and has formed several joint ventures in Poland, Romania, and the Czech Republic to upgrade Soviet-era weapons so that they meet modern battlefield standards.

Elsewhere, says Compass, Israel has signed several "potentially hefty contracts" to deliver conventional arms to Taiwan, Thailand, China, and Indonesia. Indonesia, the world's most populous Islamic state, was recently visited by Israeli Prime Minister Yitzhak Rabin.

The most popular Israeli arms shipped to foreign markets are what arms control experts call "high leverage" weapons systems. According to most defense strategists, the proliferation of high leverage weapons tends to destabilize the arms balance in a region. Israeli arms exports that fall into this "high leverage" category include advanced munitions, radar-absorbing platforms, and advanced sea and land mines.

New joint partnerships between Israel and several enormous American defense firms—including McDonnell Douglas and TRW—have facilitated a large portion of this boom in Israeli arms sales overseas. But Israel has lately signed multi-million- dollar contracts to ship several sophisticated weapons which are solely "made in Israel."

Israeli Aircraft Industries—IAI, the manufacturer of the "Arrow"—soon plans to deploy an anti-ship missile to Singapore and Chile called the "Barak." IAI now is trying to convince the U.S. Navy to buy the "Barak" and is looking for an American partner to co-produce the missile domestically.

Other multi-million IAI contracts will soon see the delivery of reconnaisance aircraft and aerial drones to Thailand and India. Government-controlled IAI has carved a large niche in the international unmanned aerial vehicles (UAVs) market and, says Compass, expects the world sales for UAVs to be worth $4 billion by the end of the century.

Israel May Have 200 Nuclear Weapons—Jane's Intelligence Review

Israel has built several facilities which provide it with the capability to launch a tactical nuclear strike against targets in Libya, Iraq, Iran and Saudi Arabia, according to an article in the November 1994 issue of Jane's Intelligence Review. The author, American military writer Harold Hough, estimates that Israel possesses 200 nuclear weapons, 50 of which can be delivered by medium-range missiles.

The nuclear weapons include gravity bombs, artillery shells, landmines, special demolition devices and missiles, Hough writes. He bases his estimates on space-based surveillance photos taken over Israel over a five-year period and commercially available from satellite imagery companies in France and Russia.

"There also is evidence that Israel is testing a sea-launched cruise missile in order to add another facet to its nuclear deterrent," Hough writes. He reports that Israel currently lacks the ability to deliver a nuclear weapon to long-range (strategic) targets, but that the Jewish state has built bunkers around the country which house several dozen intermediate-range (tactical) "Jericho II" surface-to-surface missiles capable of delivering nuclear warheads to targets 1,000 miles away.

Hough says that Israel's decision to site these missiles in the Judean foothills—a defensible area which would be the last to fall to an enemy—is evidence that the Israeli military has developed a nuclear capability as a "last resort" means of defense in case of invasion.

"This clearly signals that Israel does not consider the nuclear option to be a first-strike weapon but a last-resort device that would only be used if the state of Israel is threatened with annihilation," Hough writes.

Hough says that a 30-year-old military base near Kfar Zecharya, in the Beit Shemesh area, is the principal launch point for Israel's medium-range nuclear defenses. He also notes that southeast of this site is an ultra-modern "Jericho II" missile battery known as Kefar Zekharya, which "houses 50 nuclear-tipped missiles."

Hough's article was reprinted by the Associated Press and Reuters news agencies, and was given attention in newspapers worldwide, including Israel's Jerusalem Post.

The Israeli military—which censors all stories published in Israel which it deems "sensitive to national security"—neither confirms nor denies having nuclear weapons. Until now, Israel has tried to keep the country's nuclear program a secret. Israel has not signed the Nuclear Non-Proliferation Treaty, which requires signatories to open their nuclear facilities to international inspection.

The Israeli military neither confirms nor denies having nuclear weapons.

The most recent authoritative analysis of Israel's nuclear program was done in 1987 by Mordechai Vanunu, an Israeli nuclear technician employed at Israel's Dimona facility in the Negev Desert, which he said was used to create nuclear weapons.

Vanunu told a London newspaper that the Dimona processing facility, which was built in 1957 by French engineers, had produced enough weapons-grade plutonium to build as many as 200 atomic weapons. Later seized and secretly tried by Israeli authorities on charges of espionage and treason, Vanunu now is serving a lengthy prison sentence in solitary confinement.

Hough's report in Jane's confirms Vanunu's conclusions regarding Dimona. It also reveals that:

• Israeli nuclear weapons are designed at the Soreq research center south of Tel Aviv, which has a research reactor built by an American company.
  
  
• Israel's nuclear-tipped "Jericho II" medium-range missiles are built in a factory at Be'er Yahov, west of Jerusalem.
  
  
• "Jericho II" and other nuclear-capable missiles are tested at the Palmikim Missile Test Range, which is located just south of Tel Aviv on the Mediterranean Sea.
  
  
• Israeli nuclear weapons are assembled at a facility known as Yodefat, located in the Galilee region just east of Haifa.
  
  
• Israel stores its tactical nuclear weapons in eastern Galilee near the town of Eilabun.