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Israel Aerospace Industries and Boeing are competing to sell $300 million worth of missiles to Israel, sources in the know claimed yesterday - and the prize may include an even bigger deal with Ankara.

The sources explained that IAI had been negotiating a billion-dollar missile deal with Turkey, but the negotiations did not mature into a sale. Industry sources think the company that wins the Israeli Defense Ministry deal will be better positioned to score the Turkish one, too.

In early 2008, the Defense Ministry approved an armaments program that included the purchase of upgraded Arrow-3 missiles. The U.S. Congress is currently discussing financing for the deal. Israeli sources believe the U.S. may shoulder between $80 million and $130 million of the cost as part of its military aid for Israel.