Israeli experts working secretly in China were involved in improving the guidance system of medium-range missiles for Saudi Arabia that Israel considers a potential threat to its security, according to U.S. commercial sources and Saudi experts.
Israeli leaders have publicly expressed alarm about the presence in the Saudi kingdom of the missile, which the Chinese developed originally to carry nuclear warheads.
The Saudis and Chinese say it has been modified for the Saudis to carry only a conventional explosive. However, it has a potential range of about 1,600 miles, enough to reach every military site in Israel.
Israeli technology and expertise, therefore, have contributed to the development of a weapon the Israeli government now regards as a major new threat and a destabilizing factor in the Middle East.
The sources were divided on whether the Israeli experts knew the modified missile was destined for Saudi Arabia or thought China was selling it to Iran or Iraq, the two major clients of Chinese arms exports.
The Israelis were reported to be working to improve the accuracy of the guidance system and to help the Chinese make other changes required to convert the missile from a nuclear to a conventional weapon. The missile was still not fully operational as of March, according to Saudi sources.
China and Saudi Arabia, two highly secretive societies, went to great lengths to keep the missile sale a secret. U.S. intelligence did not obtain convincing evidence about it until early this year. The Saudi ambassador to the United States, Prince Bandar bin Sultan, conducted the negotiations with the Chinese, deliberately concealing the negotiations from the Americans. Bandar refused to discuss reports that Israelis were involved in modifying the missiles.
The sources, who asked not to be identified because some of them work in Saudi Arabia, said some of the Israelis had been using false Philippine passports traced to the Philippine consulate in Jeddah, Saudi Arabia. They said reports about these passports had been circulating for several months in Jeddah and Riyadh, the Saudi capital, and had led them to believe that the Israelis may have come into Saudi Arabia to work on the missiles.
One U.S. official said he doubted the Israeli experts knew that the missile, known by NATO as the CSS2-class and by China as the DF3A, was destined for sale to Saudi Arabia.
Saudi Arabia and China have provided few details about the missile deal except to say that the missile has been modified to carry only conventional warheads and that in the process its range has been somewhat shortened. These modifications would normally require changes in the guidance system as well, U.S. experts say.
The CSS2 is a first-generation Chinese intermediate-range missile, not known for its accuracy. The Saudis have told U.S. officials they wanted it mainly to create a credible deterrent to Iranian threats of missile attacks on oil and other targets in the kingdom. To achieve this, they needed a missile capable of reaching Tehran.
Israeli and other sources say they believe the deal involves 25 to 50 missiles, construction of a number of launch sites, Chinese training of Saudis and Chinese experts to maintain the missiles at a total cost of about $1 billion.
The exact extent of Israeli involvement in China's booming arms export trade has remained wrapped in secrecy and both Israeli and Chinese authorities routinely deny any connection. But the case of an Israeli businessman arrested in mid-December in Hong Kong with five false Philippine passports being used by other Israelis to travel to China has provided some insight into the Israel-China arms connection.
The Israeli, Zvi Gafni, told Hong Kong police that the passports were used by five Israeli businessmen to travel to Beijing last November and that he was holding them in case they returned. Gafni's lawyer implied the five were involved in arms deals but refused to disclose details.
On May 6, Gafni was sentenced to two years in prison there on a variety of charges, including possession of false passports, an illegal stun gun and marijuana.
The Sunday Times of London on April 3 published a detailed investigation into the Gafni case. It found that the five Israelis involved in the November mission were experts in the missile division of Israeli Military Industries and gave their names.
One of the five, Israel Radomsky, confirmed in an interview in Israel that he and his colleagues had gone to China on fake Philippine passports and said the trip had been cleared at the highest level of the Israeli government, The Times reported.
The paper said the Israelis had struck a deal to provide China with advanced missile technology and armor-piercing devices. There were "indications" that Israel was also helping China to develop a new combat fighter using technology derived from the canceled Lavi fighter, it said.
Little has been published in the United States about Israel's flourishing arms relationship with China. A rare discussion of the linkage was published last month by the U.S. Arms Control and Disarmament Agency in its annual report on "World Military Expenditures and Arms Transfers."
The author, Morton S. Miller, provided some details on the rapid growth of China's arms export trade, linking it closely to the Iran-Iraq war. He said China had sold more arms abroad during the first three years of that conflict than it had exported in the preceding quarter-century.
A Congressional Research Service study put China's total arms contracts with the Third World in 1980-87 at $11.1 billion, three-quarters of this to Iran and Iraq.
The key to China's success, Miller said, was obtaining western know-how and licenses to build foreign arms, "notably with Israel, whose weaponry is U.S.-influenced in its basic technology but increasingly improved and made independent of U.S. licenses" by Israeli battle experience and weapons research.
Miller said China probably views its relationship as "a back door" to acquire U.S. technology that the United States will not sell directly, while Israel sees its China connection as a conduit for sales to the Third World's most lucrative market, the Middle East.
In an interview last week, Miller discounted reports that Israel has already sold $3 billion worth of technology and arms to China. He said China's Israeli connection mostly involved the purchase of expertise and "small teams" of Israeli experts going to China to help modernize its weapons.
The Israeli initiator of the relationship, according to Miller, was Shaul Eisenberg, who in 1979 flew a group of Israeli arms experts to Beijing in his private plane.
Miller said the first Israeli-Chinese arms coproduction was a modernized version of China's T59 tank mounting an Israeli 105-mm. cannon; this was first displayed in a military parade in October 1984. Since then, he said, there is strong evidence that China and Israel also produced a Chinese version of the Israeli sea-launched Gabriel missile.
There were also reports that Israeli experts had helped the Chinese develop reactive armor for their tanks and worked on the development of Chinese tactical missiles, aircraft and artillery, he said.
"The Israelis are involved in most of the weapons modification programs in China," he said. It was "an absolutely logical extension," he said, for the Israelis to also become involved with the Chinese in improving the guidance system on their missiles.
Miller recently retired from the State Department's Bureau of Intelligence and Research, where he was a senior arms transfer intelligence analyst for 10 years.