To every black cloud, they say, there is a silver lining. Under constant threat from terrorists and hostile neighbors, Israel has become an expert in security -- and that expertise is generating huge profits.
Israel has been one of the world's big arms sellers for more than a decade, yet it really joined the major leagues this week when the government approved the $1.1 billion sale of the Phalcon command-and-control radar system to India.
Israel's annual sales of weaponry worldwide total about $30 billion. Figures released by the Defense Ministry during the Phalcon presentation to the Cabinet on Sunday show that with about 10 percent to 14 percent of the world market, Israel is the fifth-largest exporter of weapons systems after the United States, the European Union, Russia and Japan.
Aside from the moral issues raised by arms sales, there are some practical problems of realpolitik.
For one, the sales sometimes bring Israel into direct conflict with its closest ally, the United States, which has its own geopolitical interests -- as well as a domestic arms industry that it wants to protect from competition.
For another, selling Israeli know-how to other countries means some of it could wind up in enemy hands, neutralizing key advantages Israel might need in a future battlefield.
On Sunday, the government gave the go-ahead for what will be Israel's single biggest export deal to date: the sale of three Phalcon airborne early-warning systems to India for $1.1 billion.
Though the Phalcon does not have any American components and was developed entirely by Israel, the Israelis sought and received American permission for the sale last August.
That followed Israel's embarrassing cancellation of a similar deal with China in July 2000 after strenuous American objections. Washington argued then that giving the Chinese such sophisticated systems could make things far more difficult for the United States in any future air battle with mainland China over Taiwan.
Israeli officials claimed that the American objection had more to do with a desire to keep Israel out of the competition for lucrative early-warning system contracts.
The Americans only approved the India deal after they were convinced that it would not destabilize relations between India and Pakistan.
In 2003, Israel signed contracts for weapons sales amounting to $3 billion. The target this year is more than $4 billion.
Israel leads the world in a number of systems, including unmanned aerial vehicles, or UAVs, small spotter planes that fly over territory and send back data on troop and other movements; a sophisticated system for analyzing air battles, and electronic systems for fighter planes.
A partial list of current sales gives an idea of the scope of the Israeli operation. Israel sells UAVs to South Korea; the Phalcon, electronics, a sophisticated radar system, UAVs and missiles to India; anti-tank missiles to Poland; UAVs to Finland, Belgium, France and Switzerland; the system for analyzing air battles to Finland and Holland; a system for pinpointing fighter plane targets to Spain and Greece; and night-vision systems to Denmark.
Israel has upgraded tanks and fighter planes for Turkey; has sold naval systems to Australia; and has sold armor for personnel carriers, UAVs, fighter-pilot sights and the system for pinpointing fighter plane targets to the United States.
Paradoxically, Israel's big advantage over other countries is its dire security situation, which turns the country into a laboratory for arms development. Israel has to keep developing new weapons to survive. Often, because of the conflict with the Palestinians, the systems are tested and proven in battle conditions.
Some critics question the morality of such sales, saying they hardly fulfill the vision that Theodor Herzl, the father of the Zionist movement, would have hoped for -- though he probably also wouldn't have expected to find Israel still under existential threat 55 years after its founding.
Spokesmen for Israel's military industry often justify the sales by arguing that if Israel didn't provide weapons to various countries, someone else would.
Moreover, they say, arms sales are not necessarily immoral; they sometimes can prevent wars by deterring would-be aggressors.
The Israeli sales, however, sometimes lead to strained relations with the United States. In addition to the tension over the Chinese Phalcon sale, there have been other cases of the United States stifling Israeli initiatives: Washington put pressure on Britain not to buy Israeli "Spike" anti-tank missiles and to purchase American "Javelin" missiles instead.
The United States also forced Israel to accept American-made radar in the state-of-the-art, F-16I fighter bombers Israel recently received from the United States -- rather than the Israeli Elta system that Israeli officials consider to be better.
Israeli officials recognize that the more weapons they sell, the greater the risk that Israeli systems could fall into Arab hands. If that happened, the systems could be dismantled and analyzed, and crucial battlefield advantages could be nullified.
Officials already fear that some military technology they shared with the United States has reached the Egyptian army, which is supplied by the United States -- and such snafus could happen on a wider scale if Israel sells weapons to less trustworthy clients.
Israel could increase its already large share of the world weapons market if projected sales of the Arrow anti-missile system are allowed to go ahead.
India is one of several countries that has expressed interest. The United States, which funded much of the Arrow's development, so far has blocked any sale, arguing that the Arrow could destabilize India-Pakistan relations by tilting the balance of power too strongly in India's favor.
Some U.S. Congressmen have suggested that the United States deploy the Arrow until its own anti-missile defense system is operational, but so far Washington has not shown any interest in buying Arrows from Israel.
Israeli officials say Israel gladly would forego the billions of dollars it earns in arms sales if peace with the Arabs could be achieved and military development could be de-emphasized.
Until that happens, however, the byproduct of Israel's own defense needs is likely to be a thriving defense industry, conducting an ever-growing export trade.
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