Reports of Israeli Arms Sales Called `Smear Campaign'

PRIME Minister Yitzhak Shamir's Likud Party accused Washington yesterday of leaking reports that Israel illegally re-sold US arms technology to help the opposition Labor Party win the election.

Likud Party parliamentary chairwoman Sarah Doron said leaks to newspapers in the United States were an attempt to influence Israel's June 23 general election, which pollsters say will be a close fight between Prime Minister Shamir and more dovish Labor leader Yitzhak Rabin.

"These are lies and libels, and I hope this wave [of charges] will pass swiftly," Shamir said in his first public comment on the reports.

Ms. Doron condemned "the deliberate leaks from the American administration, the transparent objective of which," she said, "is an attempt to influence the Israeli election results."

US officials say they are looking into reports that Israel broke agreements on the transfer of weapons technology to China, Thailand, and possibly South Africa.

Agreements with Washington require Israel to obtain US permission before transferring US technology to third countries.

"Israel generally doesn't violate these conditions," Shamir told reporters. He did not elaborate and said he did not know who was behind the allegations.

He added he hoped the affair would end in Defense Minister Moshe Arens's meetings with Defense Secretary Richard Cheney and Secretary of State James Baker III in Washington this week.

On Sunday, Cabinet ministers called the reports part of a "smear campaign" to undermine relations with the US, Israel's closest ally and provider of more than $3 billion a year in economic and military grants.