#1
Moscow Times
May 6, 1999 
DEFENSE DOSSIER: Small Nukes Tempt Russia 
By Pavel Felgenhauer 

Last week President Boris Yeltsin chaired a secret meeting of his Security 
Council to discuss Russia's future nuclear plans. After the meeting Security 
Council secretary Vladimir Putin told reporters that Yeltsin signed three 
decrees covering "the development of the nuclear weapons complex and a 
concept for developing and using non-strategic nuclear weapons." 

The Soviet Union had tens of thousands of "non-strategic" or "tactical" 
nuclear weapons, including air bombs, sea, land and air based short-range 
rockets, heavy artillery shells, nuclear land mines and so on. Since the end 
of the Cold War most such warheads have been dismantled, but some are still 
in storage. 

The West knows that Moscow could reintroduce hundreds of additional tactical 
nukes into active service at short notice. The United States could easily do 
the same. But what would that change? Hitting NATO forces in the Balkans or 
anywhere else with a nuclear artillery shell would not be easy. 

All U.S. and Russian land-based mid- and shorter-ranged operational-tactical 
missiles that could have reached deep into Europe from Russian territory were 
destroyed in the late 1980s under a treaty signed in 1987. Reintroduction of 
some new missiles to replace the ones destroyed would take time and money 
that Russia does not have. A new missile with the range of 450 kilometers, 
sometimes referred to as the "Iskander," was fully tested several years ago. 
But there is no money in Russia's defense budget to mass-produce and deploy 
it. 

For many years the Russian Nuclear Power Ministry was developing a new 
generation of nuclear weapons small in size and in explosive yield. In 1996 
Viktor Mikhailov, the nuclear power minister, together with some colleagues, 
published an article in which he promoted the new weapons as a possible reply 
to the expansion of NATO. Today Mikhailov is no more the nuclear power 
minister. He resigned and now is the first deputy nuclear power minister in 
charge of Russia's military nuclear program. 

To deter NATO, wrote Mikhailov in 1996, "Russia could develop new-generation 
battlefield nuclear arms with relatively low capacity and reduced 
side-effects. It could manufacture 10,000 high-safety nuclear warheads with a 
yield (TNT equivalent) ranging from dozens to hundreds of tons, designed for 
theater missiles, front-line aviation and anti-aircraft complexes. 

"To implement this program, Russia would need 300 tons of weapon-grade 
uranium and 30 tons of weapon-grade plutonium," Mikhailov estimated. These 
materials are available - the reduction of nuclear weapons since the end of 
the Cold War has already produced more weapon-grade material than Russia can 
safely store. 

The main aim of Mikhailov's plan is not only the production of new 
battlefield weapons. He says, "Russia could change the perception of nuclear 
arms as weapons of mass destruction." 

Today nuclear weapons are considered so terrible that no one is ready to use 
them. Nuclear deterrence did not stop NATO attacking Yugoslavia, because no 
one in the West believes Russia would use nukes and destroy humanity because 
of a local war it does not like. Mikhailov wants to restore nukes as a weapon 
Russia can use in any armed conflict. 

All Russia's warheads, including strategic ones, would be modernized to 
produce low-yield nuclear explosions not exceeding the equivalent of several 
hundred tons of TNT. If, say, Russian oil tankers are attacked by NATO ships 
near Yugoslavia, one or several Russian intercontinental ballistic missiles 
could be fired against Western troops or bases in the region, their warheads 
programmed to produce low-yield nuclear explosions. 

Such a low-yield "pinpoint" attack would hardly trigger an immediate global 
nuclear war. Western governments would not even be sure at first whether it 
was a nuclear or a non-nuclear attack. 

The introduction of low-yield "non-strategic" nuclear weapons on existing 
platforms, including intercontinental ones, would make Russian nukes a usable 
asset in any local armed conflict worldwide and Russia could become a 
superpower again - cheaply. Of course, the same "non-strategic" 
intercontinental warheads could easily be reprogrammed to deliver a "normal" 
megaton blast if global war happened. 

In 1996 Mikhailov wrote that "technically, this is feasible, and the Nuclear 
Power Ministry is capable of solving the problem without additional nuclear 
tests and great expense." After the NATO attack on Yugoslavia, this plan 
seems to be ready for implementation.

#3
Murmansk Thieves Stealing Valuable Metals 

NTV
May 4, 1999
[translation for personal use only]
 
  [Presenter Marianna Maksimovskaya] The Murmansk 
authorities are worried about growing theft of valuable metals. They are 
being stolen from rail lines and even closed nuclear facilities. Igor 
Sorokin reports. 

  [Begin recording] [Omitted: correspondent's introduction] [Correspondent] 
Daily reports about the latest thefts really remind one of battlefield 
dispatches. 

  In the last two months alone the nuclear reactor control panel one of 
the Northern Fleet's submarines was disassembled; unidentified people 
tried to remove pressure meters from the Kola nuclear power plant's first 
power unit [Russian: energoblok], which had to undergo an emergency 
shutdown; and the last case - the Murmansk television and radio 
transmitter centre was left without telephone communications for a day. 
Somebody cut 200 metres of trunk cable in the cellar of a nearby 
building. [Omitted: captioned telecoms worker comments] 

  [Correspondent] Telecoms workers say that all they do at the moment is
repair 
damaged phone lines. [Omitted: unidentified second worker comments] 

  [Correspondent] The activities of lovers of easy money are hurting
everybody - the power and metals industries and even lift repairers. But the railways are 
suffering most. The most valuable thing that can be sold for scrap are 
cross pieces. They are being removed by the dozen, paralyzing many 
sections of rail line. Train traffic is being disrupted and passenger 
trains are arriving very late. But that is not the worst thing. 

  [Stanislav Meshalkin, chief engineer of October Railway Murmansk
Department, captioned] Carriages could come off the rails, and the consequences would 
be very serious. We can't put OMON [special-purpose police] or police 
detachments at every station. We will have to do something more fundamental. 

  [Correspondent] There are around 120 nonferrous metals trading points in 
Murmansk Region. For example, this one gives around one dollar for 1kg of copper. 
None of the traders looks into the details of where the scrap came from 
or, most important, who is selling it. 

  The traders cannot be brought to liability - they are working legally. 
However, around 30 licences have been withdrawn for various violations. 
Attempts are also being made to fight the metals thieves, but so far 
unsuccessfully. Out of over 200 cases that have been opened, not a single 
one has made it to court. 

  The local authorities had in the end to resort to radical measures. 
Buying metals from individuals has been banned throughout the Region from 
1st May until the governor issues a special instruction. [end recording] 
[Video shows rail and phone lines, nuclear submarine, other facilities] 

#4
Sino-Russian "Partnership" Developing  

Nezavisimoye Voyennoye Obozreniye, No. 13
April 9-15, 1999
[translation for personal use only]
Article by Yevgeniy Dezhin: "A Strategic Partnership Between Russia 
and China May Become a Counterbalance to Ties with NATO" 

An Alternative
 
After decades of intense confrontation, Sino-Russian relations have a 
tendency to improve. Today, evidence of this is the increase in the 
number of contacts between official delegations of the two countries on 
various levels, beginning with the business meetings of trade 
representatives and ending with summits of the leaders of the states. 
Thus, in the last 6 years, Russian Federation President Boris Yeltsin and 
PRC Chairman Jiang Zemin have each made three visits to the neighboring 
country.
 
Strengthening political and economic ties today is a priority direction of 
development of Sino-Russian relations. At the top of the list of the 
policy of peace and good-neighbor relations between the two great powers, 
on the one hand, is the statement of fact repeatedly expressed by the 
leaders of the two states about the trend toward the formation of a new 
multipolar world order. On the other hand, in the opinion of western 
experts, the strengthening of ties between Russia and China is a powerful 
counterbalance to the two countries' dependence on the policy of world 
domination being implemented by the United States. The secret agreement 
of Russia and China during discussion of questions falling within the 
jurisdiction of the UN Security Council seems even more ominous for the 
West. Thus, Russia supports China in attempts to settle the Taiwan 
problem; China, in turn, is on Russia's side in its opposition to the 
expanding North Atlantic bloc. The positions of the two states are also 
close on the problem of NATO aggression against Yugoslavia. 

Besides the similarity of the positions of Russia and China in questions of 
geopolitics, other specific interests of bilateral cooperation exist. 

Thus, from 1991 to 1998, the volume of bilateral trade increased from 
$3.9 to $6.8 billion, which exceeds by several times the volume of 
bilateral trade between China and the USSR in the mid-1980's. The nature 
of bilateral economic ties is based on the fact that the state sector of 
Chinese industry was created with the help of the USSR in the 1950's, and 
now China is interested in modernizing its industrial enterprises using 
technical assistance and Russian-made industrial equipment, since this 
modernization cannot compare in costs with similar American programs, for 
example. 

China's swift economic growth has brought to light its critical demand for 
energy sources, growing day by day. In this case, Russia simply has no 
competitors. China is vitally interested both in importing electricity 
from Siberia and gas and oil from the former Soviet Central Asian 
republics and the Russian Far East. The latter variant, however, makes 
one doubt its feasibility. Constant social tension in the Xinjiang-Uygur 
Autonomous Region places in question the security and continuity of oil 
and gas deliveries from Kazakhstan in particular. Fed buy nationalist 
contradictions between the indigenous population of the region, the 
Uygurs, and those arriving from somewhere else, the Khans, periodically 
flaring up in bloody conflicts, this hotspot of China is not contributing 
to the development of peaceful trade relations between the neighboring 
states. This is especially true since instances of Chinese servicemen 
crossing the border with Kazakhstan pursuing Uygur separatists have 
increased in frequency lately.
 
However, despite the importance of trade relations, the most profound aspect 
of Sino-Russian relations lies in the sphere of arms exports. 

Considering that the Chinese Armed Forces were patterned after the Soviet 
Armed Forces and armed with Soviet weapons, and that the United States and the 
countries of Western Europe have refused to cooperate with China in the 
military sphere due to differences of views on problems of observing 
human rights and unsettled territorial claims, Russia is an ideal source 
for China to obtain modern military technologies. Beginning in 1992, the 
total volume of arms sales to China was $4.5 billion for the Russian 
Federation, which made the PRC the most important exporter of Russian 
military equipment and technology. In the next few years, China intends 
to have in its inventory 72 Su-27 aircraft, 50 T-72 main battle tanks, 
S-300PMU surface-to-air missile systems, 2 Sovremennyy- class destroyers, 
4 Varshavyanka-class submarines, and other Russian-made armament. China 
also has acquired a license to produce Su-27 fighters and has already 
launched two aircraft of this type assembled in Shenyang. As far as the 
two Sovremennyy destroyers are concerned, according to U.S. Defense 
Secretary William Cohen, China is interested not so much in acquiring the 
ships as in acquiring the Moskit anti-ship missile system it is armed 
with, capable of waging successful combat with U.S. Navy warships 
equipped with the latest AEGIS target detection and fire control system. 

The volume of military equipment sales and the widespread use of Russian 
military technology in modernizing the Chinese Armed Forces can hardly be 
viewed as a purely commercial interest. On the contrary, all these 
factors attest to the development of a deep, stably developing strategic 
partnership between two powers. 

Such a strategic partnership causes serious concern in the West for two 
reasons. The first involves the fact that China is an emerging superpower 
with an authoritarian-type government armed with a communist ideology, 
which is developing its military muscles and advancing territorial 
claims. In addition, a new strategic alliance with Russia--a nuclear 
power and one of the members of the UN Security Council--clearly leads to 
a strengthening of China's positions in the international arena and to a 
weakening of U.S. influence on it. The second reason involves the fact 
that a new strategic partnership may decrease Russia's interest in 
developing relations with the West, especially in conditions of the NATO 
aggression against Yugoslavia, sharply condemned by Moscow.

#5
Moscow Times
May  7, 1999 
Primakov Called Not Irreplaceable 
By David McHugh
Staff Writer 

Keeping up the Kremlin's sniping at Prime Minister Yevgeny Primakov, a top
assistant to President Boris Yeltsin said Primakov was not indispensable
and that the president had a list of possible replacements close at hand.  

"For certain, there are no irreplaceable prime ministers, including
Yevgeny Maksimovich [Primakov]," first deputy chief of staff Oleg Sysuyev
was quoted as saying by Kommersant newspaper in Thursday's edition.  

"I think the president certainly has a collection of names that could
replace anyone, including the prime minister. ... Primakov is not the
messiah," said Sysuyev, who is often the Kremlin's mouthpiece on political
questions.  

Sysuyev's statements continued a steady stream of Kremlin rhetoric and
political moves aimed at chipping away at the authority of Primakov, who
was chosen as a compromise between Yeltsin and the Communist-run parliament.  

Yeltsin ceded much of his day-to-day authority to Primakov during several
months of illness, but in recent weeks has started to try to reclaim his
lost influence. The news media are full of speculation that he may fire
Primakov, or dump some of his key ministers to weaken the prime minister's
position.  

Sysuyev mentioned no names, but oft-suggested potential replacements
include First Deputy Prime Minister Sergei Stepashin, Yabloko leader
Grigory Yavlinsky, Federation Council chairman Yegor Stroyev and Moscow
Mayor Yury Luzhkov.  

Luzhkov, though, says he wouldn't take the job and on Thursday warned
Yeltsin not to fire the prime minister.  

That would be "an incorrect move," Luzhkov was quoted as saying by
Itar-Tass when asked about Sysuyev's comments. "Among us there are no
saviors or messiahs," he said, but "Primakov in comparison to previous ...
prime ministers is able to stabilize the situation."  

Primakov took over in the wake of the Aug. 17 financial crisis, but has
managed to avoid a collapse of the government's finances and hyperinflation.  

Communist leader Gennady Zyuganov joined the pro-Primakov chorus, saying
that "the ruin of the Cabinet will mean the complete collapse of our
financial and economic system," Itar-Tass reported.  

Primakov himself remained out of sight at a suburban Moscow residence,
where he is undergoing treatment for back trouble. His chief of staff, Yury
 Zubakov, said there was no political basis for Primakov's absence.  

The prime minister was reviewing economic reform legislation needed to
satisfy the International Monetary Fund, which last week agreed to release
$4.5 billion, Zubakov said.  

State Duma Speaker Gennady Seleznyov also remained hospitalized for a
scheduled examination, first announced Wednesday, and would return to work
Tuesday, a spokesman said..

#7
Expert Sees Possibility of Arms Supplies To Belgrade  

Vienna's Der Standard in German
4 May 1999
[translation for personal use only]
 Report by Roman Berger: "Chimpanzee With a Shell in His Hand" 

"All threats by Russian politicians and military 
officials against the West since the beginning of the NATO air strikes 
against Yugoslavia are banalities and silly phrases which with Moscow 
wants to maintain a facade that is no longer based on real power." This 
is the conclusion that Aleksey Arbatov, Duma member and a well known 
security expert, drew in an interview for Western journalists. 

Arbatov is a member of the Yabloko faction, which, under the leadership of 
the liberal Grigoriy Yavlinskiy, forms the only democratic opposition in 
Russia's Lower House. In the West, Arbatov is considered one of Russia's 
few independent military experts. His father Grigoriy headed the Moscow 
Institute for North American Studies for decades. 

In the past few years, Russia did everything the United States 
demanded, Arbatov believes. "We carried out disarmament measures. NATO 
today enjoys at least a 10-fold military preponderance as far as quality 
and quantity are concerned. Now we have even reached a stage where our 
own people no longer feel safe. For this reason, the government is forced 
to utter noisy but empty threats." 

In this position of weakness, politicians and military officials are 
demanding changes concerning the Russian security doctrine. They want to 
be able to use nuclear weapons in a first strike. How does Arbatov assess 
this demand? 

  [Arbatov] In view of Russia's considerable inferiority in the sphere of 
conventional weapons, the military leadership rightly calls for the right 
carry out a nuclear first strike. Yet it is important to know what is to 
happen after such a first strike. If I ask the military officials this 
question, I am faced with eloquent silence. The truth is that Russia is 
not in a position to defend itself against a response by the other side. 
In the eyes of the United States, Russia is increasingly turning into a 
chimpanzee with a shell in his hand. We are becoming unpredictable. This 
is the biggest danger. 

  [Berger] How disturbed is the relationship between Russia and NATO?
 
  [Arbatov] We were euphoric 10 years ago. Russia was told that NATO would
not expand toward the east and that it would only defend its member states. 
Both things have turned out to be wrong. We feel deceived today. Against 
this backdrop, the following question is rightly being asked: Will NATO 
intervene in five or 10 years on the territory of the former Soviet 
Union, in Nagorno-Karabach, in Abkhazia, or even in Russia itself under 
the same pretext as in the Balkans today? In view of what is happening in 
Yugoslavia, numerous Russians are afraid of NATO.
 
  [Berger] President Boris Yeltsin has stated several times that Russia will 
not be dragged into a war. Can one take that seriously? 

  [Arbatov] If the air strikes should continue for a long time, Russia might 
support Yugoslavia with weapons, which is already being demanded by a 
majority among the population today. These supplies can reach Yugoslavia 
only by sea. A direct confrontation with NATO ships blocking access to 
Montenegro's ports would be unavoidable. 

  Political pressure in Russia will grow if a ground war should take place in 
Yugoslavia. I am thinking of the several hundred thousand officers who 
were dismissed in the past few years. Many of them participated in the 
war in Afghanistan or Chechnya and are ready to go to Yugoslavia as 
volunteers. It would not be possible for the Russian government to stop 
these volunteers. As a result, NATO would be involved in brutal guerrilla 
warfare in direct conflict with the Serbian army.
 
  [Berger] Russia still needs credits from the West.
 
  [Arbatov] That is right. Yet if the situation in the Balkans should
continue to exacerbate, and if a new government should come to power in Moscow, 
Western credits will no longer be important. Then Russia will no longer 
pay its debts either. 

#9
TIME Digital
May 3, 1999
The Russians Are Crashing! The Russians Are Crashing!

The Russians are scrambling to get their missile systems ready for Y2K. The
war in Yugoslavia isn't helping

In Russia, the Y2K problem isn't about embedded chips in microwaves, it's
about nuclear bombs.  The specter of a Y2K-induced nuclear apocalypse is so
terrifying, and real, that earlier this year Russia came to the U.S. and
the IMF for help in controlling its arsenal through the turn of the
millennium. The U.S. formed a delegation of technicians to send to Russia,
but before work could begin the war in the Balkans heated up, and
diplomatic relations cooled down to Cold War temperatures. Now all bets are
off, and the clock is ticking...

The Russian missiles have safeguards preventing self-launch, regardless of
how badly their computers crash, but the Russian military early warning
system, which provides command and control information to the people with
their fingers on the button, is extremely vulnerable to Y2K-related
malfunction. In January, the Russians raised Western eyebrows when they
threw up their hands and asked for technical assistance  from the United
States (and money from the IMF) to fix their Y2K-unready machines. Needless
to say, the vision of the Russian military command staring at "cannot find
file: strategic missile data" on their frozen computer screens while poised
to launch missiles capable of destroying all life on Earth was a big
motivator for the U.S. Plans were hatched to send a delegation to Russia to
discuss Y2K cooperation.

In mid-February a group of U.S. computer specialists and military people,
led by Assistant Secretary of Defense Ted Warner, traveled to Russia and
reached a cooperative agreement with the Russians to stave off disaster.
The plan was to send technical experts to assist the Russians in updating
their computer systems and to exchange observers at key military posts over
the date change to avoid any misunderstandings. 

But now, with Russian-U.S. relations at a post-Cold War low because of the
Balkan war, the U.S. is struggling to show that this crucial agreement has
not suffered. When a Pentagon spokesperson announced on April 19 that Y2K
cooperation with Russia was continuing as planned, TIME Moscow
correspondent Andrew Meier took it with more than a grain of salt. "The
April 19 announcement was damage control by the U.S. Any real progress in
the Y2K cooperation agreement would have been much more highly publicized,
and they would have mentioned something about when the technical teams
could begin their work."  So where does the agreement stand? "As far as we
can tell, the cooperation is on hold." 

Will the Russians back out for real?  It seems unlikely. For the Russians
to prevent U.S. experts from upgrading their computers would be like
kicking the firefighters out of the house for leaving the toilet seat up.
Unfortunately, rationality has been in scarce supply ever since the war in
the Balkans began, and nobody knows what might happen, especially if NATO
deploys ground troops. The future of the Balkan war is also uncertain, and
global nuclear security has been added to the list of issues hinging on its
outcome.

#10
MSNBC
May 3, 1999
Israel, Russia in big weapons deal Nations to produce high-tech aircraft 
for sale to China 
By Jonathan Broder
SPECIAL TO MSNBC 	 	 	  

WASHINGTON, May 3  Against a backdrop of growing U.S. concern, Israel and
Russia have signed a deal to cooperate on the production of sophisticated
AWACS-style early-warning aircraft for sale to the Chinese Air Force, MSNBC
has learned. 	 

The Clinton administration is becoming increasingly convinced that Israel
is building a disturbing new strategic relationship with Moscow.             
                              
THE DEAL AND several others that are in the works represent the ripening
fruits of Prime Minister Benjamin Netanyahus controversial new policy,
which seeks to forge closer ties with Russia by offering its military
manufacturers lucrative co-production agreements with Israels
state-of-the-art defense industries. Israel already has similar agreements
China.

U.S. intelligence sources, citing classified documents, said Jerusalem and
Moscow also are close to agreement on another deal under which Israel will
upgrade aging MiG-21 warplanes for Russias Third World clients.

At least two more military co-production deals are under discussion between
Israel and Russia, the sources said, one of them apparently involving the
modernization of Russian tanks, artillery and other armored vehicles with
sophisticated Israeli guns and range-finding and targeting technology.
Israel is already working with the Russian aircraft manufacturer Kamov to
produce attack helicopters. 
       
INCREASING U.S. CONCERN

Though little has been said publicly, the Clinton administration is growing
increasingly concerned about the burgeoning Israeli-Russian relationship,
said several officials who spoke on condition of anonymity. 

With U.S.-Israeli relations already strained over the stalled Middle East
peace process, the issue is considered highly sensitive, both politically
and diplomatically.

Netanyahu and his supporters in the United States have explained the
Israeli policy in broad terms as a bid by the right-wing prime minister to
win the votes of Russian immigrants in Israels closely contested election
on May 17. Many Russians in Israel maintain close personal and business
ties with their motherland and want Israel to improve relations with
Moscow, historically the ally of Israels Arab enemies. 

But with these latest examples of defense cooperation, the Clinton
administration is becoming increasingly convinced that Israel is building a
disturbing new strategic relationship with Moscow that has far-reaching
and dangerous  implications for U.S. interests around the world, officials
said. 
       
U.S. NOT CONSULTED

Further angering the administration is the fact that Netanyahu and Israeli
Foreign Minister Ariel Sharon laid the foundations for this new policy
without any consultations with Washington. Israel is one of Americas
closest allies, receiving more than $3 billion a year in aid. The two
countries also cooperate closely on a broad range of military and
intelligence issues.                                                              

In recent weeks, Netanyahu and Sharon have tried to soothe administration
officials, quietly assuring them that Jerusalems policy of engaging Russia
dovetails with U.S. policy. 
 
They say Israels defense cooperation with Russia can be a lucrative carrot
to wean Moscow from its deals to supply nuclear and missile technology to
Iran, which is also an American concern.

But U.S. officials say there is no evidence that Israels policy of
engagement with Moscow has worked to halt Russian sales to Iran. Moreover,
they say, Israels overtures to Russia are undercutting Washingtons own
efforts to restrain Moscow. They point out that those efforts, which
include trade sanctions against a number of Russian defense companies, were
undertaken at the insistence of Israel itself.

When were sanctioning Russian firms for their cooperation with the
Iranians, it sends a real mixed signal to the Russians, said a senior
official. It certainly gives the appearance to the Russians that Israel has
its own agenda, which is not necessarily the U.S. agenda.
       
AGAINST U.S. INTERESTS

Now, with the agreement to sell co-produced early-warning aircraft to
China, officials charge Israels interests are working directly against
those of the United States. 

As Washington reels from a growing scandal involving Chinas acquisition of
nuclear and other weapons secrets from the United States, the
administration is particularly concerned about the Israeli-Russian-Chinese
deal. The arrangement, concluded over the past few weeks, confirms the
Pentagons worst fears about Chinas efforts to acquire specialized aircraft
to relay targeting data from Chinese military reconnaissance satellites.

Under the Israeli-Russian deal, Israel Aircraft Industries will mount its
sophisticated PHALCON detection and targeting systems onto Russian-made
Ilyushin IL-76 jetliners, which will then be sold to Chinas air force, U.S.
intelligence sources say. It is still not clear how many aircraft are
involved.

U.S. officials say Chinas purchase of such sophisticated long-range
reconnaissance aircraft will only aggravate the already-tense situation
between China and Taiwan and extend Chinas military reach into other areas
of the Pacific, where the United States has vital interests. 

Israel has its own interests, said the senior U.S. official, adding that
this is not the first time that Israel has sold arms to regions where the
United States has been trying to calm things down.
       
BILLIONS FOR ISRAEL

Those interests are seen as both economic and strategic. U.S. officials
note that by teaming up with Russias defense industries, Israel stands to
earn billions of dollars by upgrading the arsenals of the former Soviet
Unions client states in the Third World.        

U.S. officials say China’s purchase of such sophisticated aircraft will
only aggravate the already-tense situation between China and Taiwan.
                                 
There's all this former Soviet military equipment out there, which is
starting to wear out, and the Israelis have got very innovative techniques
to upgrade it, said another U.S. official. He noted that during various
Middle Eastern wars, Israel captured huge amounts of Russian-made hardware
from vanquished Arab armies and studied it closely.
      
So they understand the designs, he said. Working with the Russians is a
mutually advantageous deal, and they can make a hell of a lot of money. Not
to mention expanding their influence into markets that they havent been
able to penetrate before.

A case in point is the discussions over the MiG-21 upgrades, which have
been going on since January, according to intelligence reports.

There are thousands of MiG-21 aircraft in service throughout the Third
World, presenting an enormous business opportunity for Israels state-run
defense companies that produce the avionics, armaments and fuel tank and
engine designs to create more efficient and higher-performance aircraft.
       
MIGS IN WORLD HOT SPOTS

But U.S. officials worry that the most likely customers for these MiG-21
upgrades are in the some of the worlds most volatile regions. They cite
India, which is now involved in a nuclear arms race with neighboring
Pakistan, and many countries in sub-Saharan Africa, where instability and
tribal violence are growing. Under the deal now nearing completion with
Moscow, Israel would perform the aircraft upgrades in the countries that
own the planes, the intelligence sources say. 

Some experts believe that one of the greatest strategic dividends from
Jerusalems weapons cooperation with Russia will be a fresh source of money
to maintain Israels nuclear weapons and long-range missile programs. 

In the past, Israel depended on apartheid South Africa and
pre-revolutionary Iran to fund these programs, according to Avner Cohen,
who writes about Israels nuclear arsenal at Washingtons National Security
Archive. 

Both intelligence officials and non-proliferation experts believe that a
portion of Israels earnings from its arms production deals with Russia will
go to support the estimated $400 million budget that Israel uses to
maintain its super-secret nuclear weapons laboratory in Dimona, its nuclear
weapons production at state-subsidized Rafael Industries and its strategic
air force, naval and missile units.