Defense industry exporters in the UK have reported significant losses due to a government policy to restrict the sale of military equipment to Israel.

British defense exports to the Jewish state dropped from 22 million British pounds ($35.7 million) to GBP10 million over the past year, reported Guardian.

Britain imposed a de facto arms embargo on Israel last year, applying to military equipment that could be used in Israel’s continuing operations in the Palestinian territories. Each application must be examined on a case-by-case basis.

Israel has employed F16 fighter planes containing UK components in its assaults on the Gaza Strip and the West Bank, regardless of its November 2000 pledge that ‘no UK-originated equipment … are used as part of the defense force’s activities in the territories’.

Chief executive of the British-Israel Chamber of Commerce Ivor Levene, a member of a Trade Partners UK committee said “he knew of contracts and jobs being lost as a result of delays”. Last month, a lobby group composed of defense industrialists requested the UK Foreign Office to relax controls on military exports to Israel, but was refused.

Britain overrode its strict arms policy last July by selling sophisticated navigation and targeting equipment for F16s, which are being assembled in United States for Ariel Sharon’s government. Seeking to land major defense contracts in the US, the British Ministry of Defense pushed for the F16 deal to go through, despite apprehension about Arab and European reactions to the deal. British officials admitted rules on arms sales to embargoed countries via third countries were vague.

Seeking to launch a new era of “ethical foreign policy”, Tony Blair’s Labor government passed a law in 1997 stipulating that arms cannot be sold to a country “if there is a clearly identifiable risk that the intended recipient would use the proposed export aggressively against another country.”

In May 2002, UK Foreign Secretary Jack Straw demanded an explanation from Sharon’s government about the use of British military equipment in tanks and attack helicopters.

Israeli Merkava tanks have been equipped until 1996 with cooling systems made by the Surrey-based Airtechnology Group. Missile trigger systems, made by the UK-based Smiths Group, have been installed in the American Apache helicopters supplied to Israel.