#NEWS: Mystery surrounds German-Israeli submarine deal

JERUSALEM, July 25 (Xinhua) -- Tongues are wagging in Germany and Israel after the publication of reports and subsequent denials surrounding the sale of a German submarine to the Jewish state.

There is speculation in the media that during a phone conversation a week ago Israeli Prime Minister Benjamin Netanyahu threw his weight behind an Israeli request to have the price reduced on the sale of a Dolphin class sub.

While Berlin confirms Netanyahu spoke with German Chancellor Angela Merkel, the contents of the parley are not being made public.

The deal is the latest in a series that dates back to the 1990s. The previous contracts were to some extent underwritten by the German government.

Now Berlin says it is not involved in formal negotiations over the purchase of a new submarine and with that, effectively denies reports that the countries are haggling over the price tag.

Likewise, the Israeli Defense Ministry issued a denial on Friday regarding the purchase of what would be its sixth sub.

Yet the highly regarded Defense News publication maintains that the allies have been discussing the purchase for the last year.

The defense links between the two countries are strong. Whilst they began in the wake of the Holocaust and a sense of responsibility carried by the new Germany, they have developed a dynamic of their own.

In the mid 1950s Germany exported two coastal patrol vessels to Israel. In all the time since then little has been made public about the relationship but those in the know say it is very positive.

Some of the early cooperation developed out of Israel's wars with its Arab neighbors. As Israel captured Russian-made armaments it passed them on to countries such as Germany for evaluation. The Germans and others were then able to copy the manufacture of those weapons or to use the information to create defense systems.

Often the signs of a healthy defense relationship have only come to the fore in times of crisis. In 2002 when the second Palestinian intifada or uprising was raging, the Germans reportedly stopped the delivery of military components to Israel, including parts for tanks. The Germans denied the cessation was the result of Berlin's views on Israeli actions in the territories, preferring to blame internal administrative issues.

The sales have not all been in one direction. Germany is known to have purchased the Spike anti-tank missile from the Israeli governmental firm Rafael Advanced Defense Systems.

"Characterized by an extremely high technical commonality of the various missiles and launch mechanisms, the Spike system offers very low life-cycle costs. Spike missiles have become an indispensable weapon for modern armed forces, ranging from infantry and army aviation to naval defense forces," reads the product manual.

The degree to which the countries cooperate in joint programs is unclear, but in 2008 it was reported that together they were developing a nuclear warning system -- a project known as Operation Bluebird.

To this day though the delivery of three Dolphin class submarines from 1998 to 2000 is the largest deal between the countries that has been made public. A further two subs will be delivered to Israel by 2012, in addition to the sixth, which is at the center of the current controversy.

"In August 2006, the German government committed to deliver and finance one-third of the costs, approximately 1.3 billion U.S. dollars," for the two additional Dolphins, according to testimony given to the United States Congress by Paul Belkin, an expert in European and foreign affairs, defense and trade.

"Those opposed to the most recent agreement, primarily members of the Green and Left political parties, cite widespread concern that Israel plans to reconfigure the submarines to enable them to launch nuclear missiles," Belkin added.

It is widely believed by analysts that Israel's submarines do house nuclear weapons, and in part that explains much of the secrecy around the deals.

Just weeks ago it was reported that Israel's "German-built" submarines equipped with nuclear cruise missiles are about to be deployed to the Gulf, just off the coast of Iran.

"Submarines are very important to Israel. There are rumors overseas that they are equipped for nuclear second strikes but I don't think anyone intelligent can tell you any more than that," said Dan Schueftan, the director of the National Security Studies Center at Haifa University in northern Israel.

Yiftah Shapir, the director of the Military Balance Project at The Institute for National Security Studies in Tel Aviv University holds a similar point of view.

"Israel has never spoken about the role of its submarines, whether they are for patrol or attack missions, but internationally they are thought as being part of Israel's deterrence," he said.

"From my perspective it doesn't matter what their role is. As soon as it's believed to be one or the other then that's what counts," he continued.

If talks really are ongoing for the purchase of another Dolphin, whether formally or otherwise, it is quite likely that the financial element of the discussions will have hit domestic snags, both in Germany and in Israel.

On July 7 the German newspaper Bild suggested that Berlin might be about to take out of service large numbers of ships and aircraft. It is also set to cut the purchase of weapons. The proposal is part of an austerity plan for the military. While that type of deep cut is being mulled it is highly unlikely that Merkel would want to be simultaneously selling submarines to Israel at discounted prices.

Likewise, while Israel would clearly like to receive cash aid in the procurement process, the Defense Ministry also has to limit its own budget. The cabinet just approved a two-year spending plan that clips the military's wings.

Whether the media has it right or wrong in this case, Israel is always looking to expand its military and to maintain its qualitative edge in the Middle East. At the same time, the Germans are always seeking new defense contracts and Berlin is publicly committed to defending the Jewish state.

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