CHINA, ISRAEL SIGN PHALCON COMPENSATION ACCORD

TEL AVIV [MENL] -- China and Israel have signed a $350 million accord thatcompensates Beijing for Israel's cancellation of the Phalcon airborneearly-warning alert system. Israeli defense sources said the two countries signed the accord inBeijing earlier this week and this formally concludes the Phalcon episode.UnderU.S. pressure, Israel suspended the Phalcon sale in 2000 and a year latercancelled the deal, which sparked a crisis in defense relations withBeijing.