Israel stays out of Turkish deal out of fears of US Yaakov Katz , THE JERUSALEM POST Aug. 5, 2008 www.jpost.com /servlet/Satellite?cid=1215331192831&pagename=JPost%2FJPArticle%2FShowFull

Concerns that competing with American-backed defense industries would
endanger Israeli-US relations led the Ministry of Defense to back down from
submitting a bid for a $400 million deal to develop and manufacture a new
tank for the Turkish Armed Forces.

According to sources in Israeli defense industries, Turkey informed the
Israeli Defense Ministry of its interest in developing a new tank and asked
if Israeli Military Industries would be interested in putting in a bid,
which could have been for as much as $1 billion.

The sources said that SIBAT - the Defense Ministry's Foreign Defense
Assistance and Defense Export Organization - decided not to submit a bid so
as not to compete with the Americans and endanger Israeli-US defense
relations.

Instead, the $400m. deal went to South Korean contractor Hyundai Rotem,
which signed with Turkey last week in Ankara. The deal will include
technology transfers worth $330 m. as well as the production of four
prototypes for $70 m.

Defense officials confirmed industry claims that Israel was concerned that
if it submitted an offer it would upset the Pentagon and potentially upset
relations between the two countries, similar to the way tensions flared in
2005 after Israel was accused by the US of upgrading Chinese aerial drones.

In August 2005, the crisis was partially resolved after Israel and the US
signed an understanding that effectively granted the US veto power over
Israeli arms sales to selected countries which Washington felt compromised
its national security - including China. Turkey is not one of those
countries.

"America is our number one customer, with over $1 billion in annual sales,"
one official explained. "If we would have competed in the Turkish tank deal
there is a chance that we would have lost out on more significant contracts
in the US."

In response to the report, Defense Ministry Spokesman Shlomo Dror released a
statement saying that the Defense Ministry does not discuss matters related
to defense negotiations.

Israeli Military Industries has nearly completed a $700 m. upgrade of
Turkey's fleet of ageing Patton-series M60 tanks, a deal signed several
years ago.

Israel needs to look how we can be friends but even a mother and child must cut the cord for life to go on.