Israel might be able to revive the deal

Ma'ariv

"They fear China will respond by clinching arms deals with Iran, which recently showed interest in purchasing Chinese surveillance satellites."

The independent Ma'ariv speculated that the radar contract might yet be resurrected.

"Security sources in Israel said the fact that the deal with China was suspended rather than cancelled raises the prospect that after the US elections, Israel would be able to revive the deal."

"The Phalcon affair has barely died down yet, but the United States has already begun hinting that Israel should also cancel the sale of the Green Pine radar to India," Ma'ariv says.

Courageous decision

But members of the Israeli administration backed Prime Minister Ehud Barak to the hilt.

"The prime minister handled it courageously when he decided to cancel the deal," Israel's Ambassador to the United States David Ivri told Israel Defence Forces radio.

The White House objected to Israel's deal to supply China with the radar

"The decision has created a very good situation here. Many people told me our decision removed a serious obstacle in our bilateral relations.

"Longstanding friends felt extremely relieved."

Deputy Defence Minister Ephraim Sneh pondered the impact of the decision on relations with Beijing.

"Such issues are best discussed directly," Mr Sneh told Voice of Israel radio. "I think our explanations merit understanding."

US sensitivity

Asked why Israel didn't cancel the contract earlier to avert damaging relations with the US Congress, Mr Sneh replied: "We looked for other solutions. We did not necessarily see eye to eye with our critics.

"At a certain point, discussions in the US Congress reached a crucial stage and US sensitivity to the issue turned high and very emotional.

The reputation of our military industries has been damaged

Ephraim Sneh

"In the final analysis, we had no choice other than to make this decision."

Mr Sneh acknowledged that Israel's credibility would be undermined if its military deals were subject to US scrutiny.

"The reputation of our military industries has been damaged," he said.

"We will now have to double our efforts because the military industries are the basis of our military-technological edge. If they collapse, we will be in a very tough situation."

BBC Monitoring, based in Caversham in southern England, selects and translates information from radio, television, press, news agencies and the Internet from 150 countries in more than 70 languages.