Israel Agrees to Limit Missile Data Transfers : Technology: Under apparent U.S. pressure, it will join treaty designed to halt spread of weapons to Third World.

Under apparent pressure from Washington to comply or risk exclusion from new defense business with the United States, Israel has agreed to sign an accord to limit transfers of missile weaponry and technology to other countries, officials here said Thursday.

The treaty is called the Missile Technology Control Regime, an accord designed to halt the spread of ballistic missiles to the Third World. The United States, Western European powers and Japan set up the controls in 1987; in all, 17 countries have joined the pact.

“We decided to join recently and just need to work out details,” said government spokesman Yossi Olmert.

He and a spokesman for the Defense Ministry denied Israeli press reports that the Bush Administration had threatened to bar Israeli industries from participating in contracts let by the Pentagon for missile systems.

But Zeev Schiff, a respected defense columnist for the Haaretz newspaper, wrote that “Israel, by doing this, has removed the possibility of U.S. pressures and sanctions in a sensitive sphere.”

In Washington, an analyst who closely follows such dealings said the Pentagon was reluctant to let Israel bid on new contracts for space and missile projects unless it signed the technology accord. Israeli defense industries hold about $1 billion in Pentagon contracts and the government is eager for more to defray the costs of building its own weapons.

The Bush Administration has grown irritated with the Israeli government for reported missile dealings with China and South Africa. Israel has been helping China upgrade guidance systems for long-range ballistic missiles and has tested missiles and rocket engines jointly with South Africa.

Reports here say that Washington is demanding Israel’s compliance by year’s end but that Israel is holding out for another year of grace to rework missile contracts with its foreign customers.

This year, the Bush Administration has added leverage to get its way. The Defense Ministry plans to ask the United States for a boost in military grants from $1.8 billion to $2.5 billion. The ministry wants authorization to use about $400 million of the increase to invest in its own industries, rather than to have to buy U.S. equipment.

That would double the amount of aid Israel is permitted to use for domestic weapons development. Such an arrangement is unique with Israel among recipients of U.S. military help.

Israel views investment in home defense industries as protection against a cutoff or reduction in U.S. aid. Critics in the United States say that by giving money to Israel to build its own weapons, Washington effectively subsidizes a competitor in the world’s arms markets.