The U.S. Defense Department said ithas given preliminary approval for Egypt to produce the M-1A
tank, the main battle tank of the United States.
    The State and Defense Departments said talks were going on
between the two countries dealing with Egypt's ability to build
the tank and protect its high technology secrets.
    The U.S. Army signed a contract four weeks ago to pay
General Dynamics Corp &lt;GD> 3.5 billion dlrs over the next four
years to build 3,299 of the tanks.
    Pentagon officials, who asked not to be identified, told
Reuters Congress probably will not be officially notified of
any final plan until after October 1. Congress would then have
30 days to veto Egypt as the first foreign co-producer of the
M-1A.
    U.S. defense officials said Congress could approve the plan
because Egypt is the only Arab country which has signed a peace
treaty with Israel. But they said the issues of technology
transfer and a possible loss of U.S. jobs could raise problems
for the plan while Israel would also be expected to lobby
against any production agreement.
 Reuter
