Iran Builds Rockets to Arm Hezbollah, Deter Sanctions (Update2)

Aug. 4 (Bloomberg) -- Many of the rockets Hezbollah is firing into Israel are made in Iran, demonstrating the Islamic republic's success in copying Chinese and Russian technology to build its own weapons industry.
Weapons of Terror

The Noor missile is modeled after China's C802, which has a radar-jamming device that gives it a 98 percent hit rate, according to the Web site.

The Israeli ship that was hit by a Noor missile didn't have its defense system turned on because ``the truth is we didn't know Hezbollah had that specific missile,'' said Kuperwasser, who until two months ago was head of the assessment division in a military intelligence unit. ``It was a surprise,'' he said by telephone from Tel Aviv.

While other weapons Iran supplies to Hezbollah aren't very sophisticated, they are effective at provoking fear, said Andrew Brookes, an analyst at the International Institute for Strategic Studies in London and a former Royal Air Force pilot.

``Obsolete technology can be used as terror weapons,'' he said.

International Network

Hezbollah may have even more deadly weapons in its arsenal, said Schenker, formerly a Middle East adviser at the Pentagon. ``It raises the specter that Iran has provided Hezbollah with other capabilities,'' he said.

Iran still gets some military equipment from China and sources around the world, according to the U.S. government. Several people and companies have been accused or convicted in the U.S. of selling sensitive technology to Iran and Hezbollah.

In May, a Singapore businessman was convicted by a federal jury in Brooklyn of obtaining U.S. parts for C-130 military transport planes and P-3 naval aircraft and diverting them to Malaysia for shipment to Iran, the Justice Department said in a statement.

The U.S. Treasury Department on June 13 froze the U.S. assets of China Great Wall Industry Corp. and three other Chinese companies after accusing them of supplying Iran with missile components or technology that can have military use. China Great Wall issued a statement denying any role in weapons proliferation.

China began selling ballistic and Silkworm cruise missiles to Iran during the 1980s, according to a 1999 report by the U.S. National Intelligence Council. It also sold gyroscopes and guidance systems to help Iran develop indigenous weapons based on its cruise missiles, the report said.

`Extensive Chinese Cooperation'

While the communist country can legally sell missiles to Iran under international law, any transfer to Hezbollah is illegal, said Ralph Cossa, president of Honolulu-based Pacific Forum CSIC, part of the Center for Strategic and International Studies in Washington.

``There is, no doubt, a very extensive Chinese cooperation with the Iranian ballistic missile program,'' John Bolton, U.S. ambassador to the United Nations, told a Senate hearing last week.

He said it's critical China adopt the same nonproliferation objectives as the U.S. because sales of such technologies and weapons ``ultimately are threatening to them as a destabilizing force in the world as a whole.''

`Only Defensive Weapons'

China only sells weapons to sovereign states and requires that buyers pledge not to transfer technology to third parties, the country's Foreign Ministry said in a faxed statement responding to questions from Bloomberg News.

``China's weapons exports follow these principles: We only sell defensive weapons, exports will not destabilize regional stability, and our exports will not cause internal instability,'' the ministry said.

Hezbollah funds itself with direct transfers from Iran, and by creating front companies for currency counterfeiting, cigarette smuggling and other illegal activities, according to U.S. Treasury and State Department officials.

Iran's subsidy to Hezbollah is about $300 million a year, with $100 million for social programs such as schools and the rest for military purposes, said Ariel Cohen, a senior fellow at the Washington-based Heritage Foundation.

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