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U.S. Offers $30B In Military Aid To Israel

August 16, 2007 / 7:13 AM EDT / CBS/AP

The United States offered Israel on Thursday an unprecedented $30 billion military aid package, bolstering its closest Mideast ally.

The aid deal represents a 25 percent rise in U.S. military aid to Israel, from a current $2.4 billion each year to $3 billion a year over 10 years.

Nicholas Burns, the U.S. undersecretary of state for political affairs, and Israeli Foreign Minister Director-General Aharon Abramovitz signed the memorandum of understanding on the assistance at a ceremony in Jerusalem.

The aid is meant to strengthen Israel against a growing threat from Iran, and to offset a major U.S. arms deal with Saudi Arabia, reports CBS News correspondent Robert Berger.

The U.S. plans to offer Saudi Arabia advanced weapons and air systems that would greatly improve the Arab country's air force. Israel has said it has no opposition to the U.S. aid to Saudi Arabia.

Burns said regional threats to Israel — Iran and the Hezbollah and Hamas militant groups — also threaten the United States.

"We look at this region and we see that a secure and strong Israel is in the interest of the United States," Burns said.

(AP Photo/Kevin Frayer)

The chief of Israel's central bank, Stanley Fischer, seen at left in this photo shaking hands with Burns, said the U.S. aid is of "critical importance" to Israel, whose defense budget constitutes about 10 percent of its Gross Domestic Product.

The aid package to Israel was finalized in June in Washington between President Bush and Israeli Prime Minister Ehud Olmert. Olmert has said the increase in military aid to Israel would guarantee its strategic superiority, despite upgrades to Arab countries in the region.

The U.S. has long-standing commitments to Israel and to Egypt, which in 1979 became the first Arab state to make peace with Israel. Egypt currently gets $1.3 billion a year in military assistance. At the same time, the U.S. is seeking to strengthen other moderate Mideast allies, largely as a counterweight to Iran's growing influence.

The United States and Israel accuse Iran of developing nuclear bombs, a charge Tehran denies. Iran, whose leader has repeatedly called for Israel to be to wiped off the map, is viewed by Israel as its main enemy. Shiite Muslim Iran also concerns the Saudis and other Sunni-led Arab allies of the United States.

The Bush administration must still receive congressional approval for the aid deals, but Burns said he believed there would be little opposition in the Senate and House.

In other developments:

Two months after the Gaza civil war, there's talk of reconciliation between rival Palestinian factions, reports Berger. U.S.-backed Palestinian President Mahmoud Abbas has appealed to Hamas leaders in Gaza to reunite the Palestinian territories. Abbas, who heads a moderate government in the West Bank, said the division was temporary. After Hamas seized control of Gaza, Abbas described the group as terrorist murderers. Israel is worried. Officials say reconciliation between Abbas and Hamas will doom the peace process.

Abbas ruled out Wednesday an early election in the Palestinian territories before the Gaza Strip is back under his control. His remarks to a meeting of the Palestinian trade unionists held in the Jordanian capital came to disperse rumors that he plans parliamentary elections that would exclude Gaza, which was taken over in a bloody coup by the militant Hamas two months ago. "When we talk about early elections, and we haven't decided this yet, we speak about elections to be held in the West Bank and Gaza, not in the West Bank alone," Abbas told the gathering.

Japan's foreign minister launched plans for a joint Israeli-Palestinian industrial park in the West Bank that he said would promote peace in the region through prosperity. The Japanese initiative Wednesday comes amid a flurry of new diplomatic activity to bolster Abbas. Plans for the park in the city of Jericho include factories and canneries, a new commercial bridge over the Jordan River and an airport for Palestinian goods on the Jordanian side of the border, said Ahmed Sobeh, the deputy Palestinian foreign minister.

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