Official confirms U.S. readying Saudi arms deal

By Andrew Gray

WASHINGTON (Reuters) - The Bush administration is preparing a package of arms sales to Saudi Arabia and other Gulf states that could be worth some $20 billion over the next 10 years, a senior U.S. defence official said on Saturday.

The official largely confirmed reports of the deal in The New York Times and Washington Post ahead of a joint trip to Saudi Arabia and other Middle Eastern countries by Secretary of State Condoleezza Rice and defence Secretary Robert Gates.

The official, speaking on condition of anonymity as the deal has not yet been officially announced or completed, said the administration hoped to present the package to the U.S. Congress for approval in the fall.

Washington is striving to assure Gulf allies, worried by the growing strength of Iran and war in Iraq, that the United States is committed to the region and will stand by them, with arms sales part of that process, U.S. officials say.

The United States has sought to allay Israeli concerns about the forthcoming package. The senior U.S. defence official said Washington was working on a military assistance deal for Israel expected to top $30 billion during the next decade, a significant increase on current levels.

The Saudi package would upgrade the country's missile defences and air force and increase its naval capabilities, the official said. It "may make sense" also to provide Saudi Arabia with satellite-guided munitions, the official said.

"None of these things are final proposals by any means," the official said, stressing discussions with the countries involved and members of Congress were still needed.

The package would cover other U.S. allies in the Gulf, the official said. Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates are expected to benefit, the Times and Post said.