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On March 16, 1992, I arrived in Washington, as Israel's defense minister, to meet then U.S. secretary of defense Dick Cheney. We had become friends during the Gulf War when we were in daily contact on the many issues of mutual interest that cropped up hour by hour. But then, facing him in his Pentagon office, I could sense a certain coolness in his attitude toward me.

"We have information from reliable intelligence sources that you are transferring technology and materiel from the Patriot batteries supplied to Israel by the U.S. for its defense to the Chinese," he said.

I was astounded by the allegation, which had no basis in fact. The issue was finally resolved when Cheney accepted my suggestion that a U.S. team be sent to Israel to look into these charges.

The episode was a reminder, if one was needed, that the U.S. government took a very serious view of the unauthorized transfer of U.S. technology, especially to China, which was perceived in Washington as potentially hostile. I had to admit to myself that although the charges were totally untrue, the U.S. had reasons to be suspicious because in the past there had been allegations that some Israeli systems that included a few U.S. components had been sold to China.

In the case of South Africa as well, some years earlier, it had been charged that Israel had not fully lived up to its commitments to the U.S. regarding military sales to that country. As defense minister, I had done all in my power to make sure that we scrupulously adhered to our commitments to the U.S. when contracting for military sales abroad.

For the following seven years, it was smooth sailing between the U.S. and Israel as far as Israeli military sales were concerned - until, without warning, the U.S. raised objections to a contractual obligation Israel had undertaken some years earlier to supply an airborne warning and control aircraft, the Phalcon, to China. The aircraft did not contain any U.S. components. Not long before delivery, a significant portion of the payment having already been made by the Chinese, Washington suddenly insisted that the sale be canceled, claiming that the sale would negatively impact on U.S. strategic interests. The government of Ehud Barak promptly accepted the U.S. demand; the sale was canceled, and the money was returned to China.

The opportunity to arrive at an understanding on the subject of Israeli military sales between Israel and the U.S. was missed. Presumably, the Barak government had more important issues on its agenda at the time.

The lack of understanding was to lead to much more serious problems as time went on. Washington's demands have now escalated from a perfectly understandable requirement that U.S. approval be obtained before any Israeli systems containing U.S. components are sold, to a position that U.S. approval is required for all Israeli military sales. The tension accompanying this disagreement represents an unprecedented low point in Israel's relations with the United States.

To those holding their breath in anticipation of the Israeli withdrawal from Gush Katif and northern Samaria, this may seem, by comparison, a minor matter, and has therefore been neglected by the political establishment. But for Israel's defense industry, a mainstay of Israel's defense posture, this is a major issue. It impacts on the viability of Israel's defense industry and therefore on the state's ability to maintain a quality edge over the weapons systems in the hands of countries that are hostile to Israel.

Israel should, of course, show understanding for U.S. strategic concerns. Israel, itself, in years gone by, had asked the U.S.to show such understanding for Israel's strategic concerns when selling weapons to Arab countries. But this is a far cry from handing over control of all Israeli military sales to Washington. The over two billion dollar a year U.S. military assistance to Israel has on occasion been mentioned as a justification for Israeli acceptance of that kind of U.S. control. If this is the case, Israel would do better forgoing this aid, which in any case inflicts collateral damage on Israel's defense industry and brings in its wake large-scale U.S. military assistance to Egypt, leading in turn to a substantial increase in Israel's defense expenditures.

One thing should be clear. This is a matter too serious to be left to the bureaucratic echelon in the Defense Ministry. It needs to be discussed at the highest political level between Israel and the U.S. In such discussions, Israel must show respect for U.S. strategic concerns and the U.S. should understand Israel's vital need for a viable advanced defense industry that cannot exist without sales outside Israel. The matter has been neglected for too long.