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The Knesset Foreign Affairs and Defense Committee urged a delegation of U.S. congressmen yesterday to increase American funding for development of the Magic Wand system for defense against medium-range rockets and missiles.

Committee members argued that this is of mutual interest, since American army bases in the Middle East and Afghanistan are as vulnerable to such rockets as Israeli towns are.

The four senators and representatives, headed by Senate minority leader Jon Kyl (R-Arizona), arrived earlier this week for Congress's semiannual dialogue with the Foreign Affairs and Defense Committee.

The Israeli team was headed by committee chair Tzachi Hanegbi (Kadima) and former committee chairman Yuval Steinitz (Likud), who founded the dialogue along with Kyl.

The delegation also met with Prime Minister Ehud Olmert, Foreign Minister Tzipi Livni and Mossad chief Meir Dagan, and also took a tour of Sderot.

Much of the talks were devoted to the new U.S. National Intelligence Estimate on Iran, which asserted that Tehran had halted its nuclear weapons program. Kyl nevertheless insisted that there is "very little difference" between Israeli and American assessments of Iran. Both believe that it is pursuing nuclear weapons, he said; the main difference is in the projected timetable for their acquisition - and even there, he added, the differences are "very small."

Kyl, a co-sponsor of the law that enabled the U.S. to impose sanctions on companies that trade with or invest in Iran, believes that such sanctions should be intensified and applied to more companies.

Steinitz has used past dialogue sessions to complain about Egypt's failure to prevent arms smuggling into Gaza, resulting in a recent congressional decision to reduce American aid to Egypt by $100 million. Kyl said yesterday that Egypt "can do more" on this issue, and Democratic congresswoman Jane Harman agreed, arguing that Egypt could stop the arms before they even reached the tunnels under the border.

Republican Senator Sam Brownback said he did not think Jerusalem should be discussed in Israeli-Palestinian talks, and urged the U.S. to move its embassy to Jerusalem.