Amid reports of a blockbuster Iranian-Russian arms deal, the Bush administration has unveiled a proposal to spend tens of billions to upgrade the military arsenals of key allies in the Middle East.

The US arms packages would total $30 billion for Israel and $13 billion for Egypt over the next few years, with an additional $20 billion offered to Saudi Arabia and other Persian Gulf states.

US Secretary of State Condoleezza Rice describes the proposals, which require approval by Congress, as a means to offset a "negative influence" in the region by Syria, Iran, al-Qaeda and Hezbollah.

Meanwhile, Israeli media reports last week that Iran is in negotiations to buy 250 Sukhoi Su-30s to replace its entire fighter arsenal were denied by Russian arms export firm Rosoboronexport, which called the reports a "delusion".

A London-based newspaper has also reported that Iran may seek to acquire MiG-31s and Su-30s from Syria, which is also reportedly in negotiations with Rosoboronexport.

The truth may take several months to unwind, but some US analysts already foresee a broad rebalancing of military strength in the region.

For instance, the proposed US assistance agreements and the threat of Iranian arms deals could pave the way for sales of fifth-generation fighters to Israel and other Gulf states, as well as more sophisticated air defence systems, says Norman Polmar, a Washington DC-based military affairs expert.

Source: Flight International