The diplomatic smiles that accompanied the whirlwind visit of U.S. Secretary of State Condoleezza Rice to Israel earlier this week cannot cover up the crisis that has been going on for months between the U.S. administration and the Defense Ministry. It is a serious crisis, which has spilled over into political and economic spheres. It involves a punishment by the United States, which is damaging the Israeli defense industries and the Israel Defense Forces. Israel is making efforts to end the dispute but is not succeeding, apparently because it is a crisis of confidence.

The assumption was that Washington would end the crisis before the disengagement. Instead, the Americans have presented more stringent demands. The crisis began with a report about upgrading the Harpy, an Israeli attack UAV (unmanned aerial vehicle) sold to China, but as the crisis wore on, fundamental problems in the relations between the United States and Israel were highlighted.

One of the conclusions is that no comprehensive strategic dialogue is currently taking place, similar to that which took place in the past, for example, when the dialogue was conducted by former Defense Ministry director general David Ivri. Some top Israeli officials certainly will claim that talks between two senior officials about the disengagement and the security fence are the "strategic dialogue." That is a superficial and mistaken approach.

The strategic dialogue between the countries has slowly evaporated over the past two years, after Dan Meridor was removed from his job as the Israeli representative for discussing strategic issues. Minister Tzachi Hanegbi, who was appointed by the prime minister to replace Meridor, has not made himself felt in this sphere. The impression is that the Americans prefer not to discuss strategic issues with Hanegbi, because they are aware of his extremist views.

An example of the shallowness of the strategic contacts is the absence of a fundamental discussion between the United States and Israel regarding the U.S. administration's plan to expand the democratic process in the Middle East. This process has scored some success in several places, but at the same time it is also giving free rein to extremist forces, which are liable to endanger pro-Western regimes such as Egypt. This important topic could serve as a good opportunity for Israel to conduct a strategic discussion with the U.S. Despite that, however, nothing has happened.

We must ask how it happened that almost all Israel's assessments regarding the conduct of negotiations with the Americans in the Chinese UAV affair have proved to be mistaken. Israel maneuvered itself into a situation where its friends in the administration and in Congress cannot, or do not wish to, help it in this matter. Defense Minister Shaul Mofaz was forced to ask people from outside the Defense Ministry to head the negotiating teams. These include former Air Force commander Major General (res.) Herzl Bodinger and Zvi Shtauber, the former Israeli ambassador to Great Britain who is now the director of the Jaffee Center for Strategic Studies in Tel Aviv University. Afterward, Mofaz turned to Brigadier General (res.) Uzi Eilam, who was the director general of the Israeli Atomic Energy Commission, and the IDF's director of weapons systems development and infrastructure, and asked them to formulate a proposal for a law to oversee defense exports. This means that no suitable person who was acceptable to the Americans was found in the Defense Ministry.

The American side is broadcasting that it has been burned by Israel several times, and this time it has decided to be firm. Because they feel affronted, they are not taking into account the political situation in Israel, and are trying to dictate to the Knesset, in an insulting manner, a timetable for its decisions. An agreement is meant to end a crisis, and not to force a friendly nation to agree to be punished in stages. Even a banana republic would not sign such an agreement.

On the other hand, it is clear that the supervision of arms exports from Israel is deficient, and rests entirely in the hands of the security establishment. The political leadership is barely involved. The interministerial connection is defective, and even today the Defense Ministry does not keep the Foreign Ministry informed of the details of the negotiations with the Americans. Israeli custom officials do not have instructions regarding the export of products that are likely to be used for military purposes as well. Even without American pressure, the time has come to introduce order into defense exports from Israel.