They Spy on US, Sell Weapons to China, and We give them $2 billion dollars. Who's the Suckers in this Deal?

JERUSALEM (Reuters) - Israel is trying to defuse a festering dispute over longstanding U.S. opposition to its arms sales to China and faces new U.S. demands for closer oversight of weapons deals with India, Israeli officials said on Tuesday.

The affair has strained security ties between Israel and the United States, its main ally and provider of about $2 billion in annual defense aid, at a time when it seeks U.S. assistance to help implement its planned withdrawal from Gaza this August.

"There is a crisis that has been going on for almost a year," Yuval Steinitz, head of the parliamentary Foreign Affairs and Defense Committee, told Israel Radio.

Israel's Haaretz daily reported the United States recently suspended several weapons and technology projects with Israel, moves which the newspaper said deepened the dispute that erupted last year over Israeli-supplied Harpy attack drones to China.