German govt to approve Israel arms deals-report

BERLIN, July 1 (Reuters) - The German government will no longer block the export to Israel of Dingo 2 armoured transport vehicles and the sale of two submarines should be approved in July, a German newspaper reported on Saturday.

The daily Die Welt cited unnamed sources inside the grand coalition as saying that the German government's security council had no objections to the Dingo sale for test purposes.

The sale of the Dingo 2 troop carriers, manufactured under licence from Germany's Krauss Maffei Wegmann, has been on hold for over a year due to concerns over whether the vehicles were to be used by Israeli troops in Palestinian territories.

The Dingo 2, a high-quality wheeled vehicle equipped with a machine gun and armoured against mines, shrapnel and hand-held weapons, is made under licence by U.S. defence company Textron Inc. , but its sale would require Berlin's approval.

Defence experts say the Dingo 2's are intended to replace existing Israeli manufactured light armoured vehicles like the Sufa and Abir. Israel has expressed interest in some 103 vehicles at a cost of around $100 million.

Die Welt also said a 1 billion euro ($1.27 billion) deal on the sale of two submarines to Israel would be inked this month.

German Defence Minister Franz Josef Jung told Reuters in an interview earlier this week that the deal was still in the approval process.

The order was for two Dolphin class submarines from German firm Thyssen-HDW, with the German government footing one third of the bill.

Israeli security sources have said the new submarines were needed to counter long-range threats like Iran, whose president has called for the Jewish state to be "wiped off the map" and whose nuclear programme has raised fears it wants atom bombs.

Israel, assumed to be the Middle East's only nuclear power, already has three of the diesel-powered Dolphins.