Russia has signed an unprecedented military co-operation agreement with Israel, with the pact believed to include the establishment of a $300 million joint venture to manufacture unmanned air vehicles in the country.

The development is in line with a domestic production goal outlined by Russian defence minister Anatoly Serdyukov. "We will only buy so many [UAVs]," he says. "We will test them and see whether they are good for our needs. After that it will be joint production on Russian territory."

The new co-operation agreement was signed earlier this month, during a visit to Moscow by Israeli defence minister Ehud Barak.

Moscow has previously signed two such contracts with Israel Aerospace Industries. In April 2009, the company began delivering two Bird Eye 400, eight I-View 150 and two Searcher II UAVs. Another 36 air vehicles will be handed over from later this year under an order worth $100 million.

Russia is now interested in also acquiring IAI's Heron medium-altitude, long-endurance UAV, according to Israeli media reports.

IAI is understood to be in favour of the proposed relationship, but the deal is now being considered by the Israeli cabinet, which has concerns over Moscow’s strong ties with some of its enemies. A decision is expected within the coming months.

Serdyukov also identifies France as another potential partner in the production of unmanned systems in Russia.

Deputy defence minister Vladimir Popovkin revealed in April that Moscow had spent about Rb5 billion ($172 million) on the development of indigenous UAVs that had failed state tests. Shortcomings are reported to have included high acoustic signatures and the insufficient miniaturisation of mission payloads.

Meanwhile, Russian UAV maker Vega and Ukraine's Motor Sich are discussing the possible use of the latter's engines by Russian air vehicles, confirms Vega chief executive Vladimir Verba.

Additional reporting by Arie Egozi in Tel Aviv

Source: Flight International