Israel Reassured on Missile Defense : U.S. Aid: Cheney says the Arrow project will continue despite crunch.

Defense Secretary Dick Cheney assured Israel on Friday that the United States will continue to support Israel’s $160-million Arrow missile-defense program despite the U.S. budget crunch.

The Pentagon said Cheney told Israeli Defense Minister Moshe Arens that Washington backs continuing research and development on the second phase of the project, which was launched two years ago as part of the U.S. “Star Wars” missile-defense program.

However, the Pentagon statement said details of the second phase have yet to be worked out.

Cheney’s two-hour meeting with Arens was the first high-level contact between the Bush Administration and Prime Minister Yitzhak Shamir’s five-week-old, right-wing government.

The Pentagon said Cheney “stressed the friendship between the two countries and reaffirmed the U.S. commitment to Israel’s security.”

At the same time, the State Department announced that Secretary of State James A. Baker III will hold his first meeting with newly appointed Israeli Foreign Minister David Levy on Aug. 9-10 in Washington. Baker has been far more critical than Cheney about Shamir’s government.

State Department spokeswoman Margaret Tutwiler said Baker hopes the meeting will help to “develop a credible basis on which to move the peace process forward.”

Baker has accused Shamir of foot-dragging on U.S. efforts to begin a dialogue between Israel and Palestinian representatives. Last month, Baker sarcastically recited the White House telephone number and told Israeli officials to call when they were ready for peace.

Baker had suggested that Levy meet him in Paris earlier this week, but Levy, who is recovering from a mild heart attack, said he was too ill to make the trip.

Israeli sources have said Levy prefers to have his first meeting with Baker in the United States, rather than in a third country, to emphasize the importance of the U.S.-Israeli relationship. The fact that he readily agreed to a far more demanding trip so soon after the proposed Paris meeting seems to lend some credence to that view.

Arens, Levy’s predecessor as foreign minister, told reporters at the Pentagon that Israel “attaches very great importance” to the Arrow project, 80% of which is financed by the U.S. government.

The Arrow is intended to shoot down the kinds of short-range missiles that Israel’s Arab adversaries have deployed or are developing.

It was proposed as an international contribution to the U.S. Strategic Defense Initiative, commonly called “Star Wars.” Technologically, defending against short-range missiles poses far less daunting problems than the strategic missile defense that is the heart of “Star Wars.”

An Israeli spokeswoman said Arens told Cheney that the first phase of the Arrow project “is going very well, and we would hope to go ahead with the second phase.” Israel hopes to deploy the weapon within five years.

Meanwhile, Tutwiler confirmed that the United States has postponed a meeting, scheduled to begin next week, of a joint U.S.-Israel committee that coordinates Washington’s $1.8-billion-per-year military aid program.

Reports from Israel said the postponement appears to be an attempt by Baker and the State Department to bring more pressure on Israel to agree to Washington’s plan for negotiations with Palestinians. But Tutwiler said there is no such meaning to the decision.

She said the meeting was put off until September because the size of the military aid program is one of the issues in the current round of budget negotiations between the White House and Congress. Until the budget is resolved, she added, there is no point in trying to plan ways to spend the money.

“The postponement is purely a practical matter,” Tutwiler said. “United States-Israel relations remain strong. Our commitment to Israel’s security and to the preservation of its qualitative edge remains unshakable.”

Israeli Embassy spokeswoman Ruth Yaron said: “We were asked to postpone the meeting, and we agreed to the postponement. We don’t read anything into it beyond what we were told.”

However, the postponement seemed to catch some Israeli officials by surprise. David Ivri, director general of the Defense Ministry and Israel’s representative on the Joint Security Assistance Program committee, accompanied Arens to Washington, intending to remain for next week’s meeting.