In late June 2005, Israel and the United States drafted a memorandum stating that the two countries are "strategic partners" regarding arms sales to other nations. Each country will be considerate of the other's concerns about weapons and technology being transferred to other countries that could be classified by one as threats. This agreement ended an export crisis between Israel and the U.S., which began in late 2004 after the U.S. demanded that Israel not return spare parts of military drones to China that had been sent to the U.S. for repairs. This bitter conflict over military technology sales was one of the most serious to occur between the two countries in decades, and was met with grave concern on both sides. The U.S. administration claimed that Israel had kept secret some details of their arms deal with China to improve assault Harpy UAV drones, and promptly cut relations with the Israel Defense Ministry director-general Amos Yaron. Sanctions were also enacted on defense ties with Israel during the period of the crisis.
The new agreement, which is called the "Declaration of Understanding on Technology Exports," will hopefully ensure that both countries maintain transparency with weapons sales to other countries, especially nations that one country may consider a security threat. It also ensures that America will not try to force Israeli defense businesses out of the international marketplace.
Ambassador Danny Ayalon said the agreement "will upgrade Israel's standing and its relations with the U.S. to a status similar to that of countries like Britain and Norway, and will also help prevent misunderstandings in the future...The United States' best friends have signed such memorandums of understanding."
Israel will also give the U.S. a written commitment stating that it would more tightly regulate defense exports. New amendments have also been introduced in Israel to give greater punishment to those who sell arms that violate the new regulations.
Sources: Aluf Benn, "Israel, U.S. draft agreement for openness, equality in arms deals," Ha'aretz, (June 27, 2005)