Israel and the US announced Tuesday night they had signed a memorandum of understanding that will effectively end tension over Israel's defense deals with China, but which will also significantly regulate future Israeli arms sales to third parties. The Defense Ministry and the US Defense Department issued a rare joint statement saying that the memorandum, which the two sides have been negotiating for months, was intended to solve problems that "seriously harmed the relations between the defense establishments." The statement said that steps would be taken in the coming months to return "full trust" between the countries' defense establishments. The memorandum was designed to prevent future rifts over Israeli technology exports to China. The understanding is believed to effectively grant the US a veto over Israeli arms sales to selected countries if Washington feels its national security is compromised. As a result of the understanding, the Pentagon is expected to remove all restrictions on strategic and industrial cooperation that were imposed on Israel due to suspicions over Israeli-China defense trade. For instance, the US is now expected to lift the freeze on Israeli involvement in key projects like the F-35 Joint Strike Fighter. Israel has reportedly agreed to set up a review of extensive categories of dual-use items that until now have either escaped scrutiny or were handled in an inconsistent and unaccountable manner. The crisis, which put a serious crimp in the defense relationship with the US, revolved around the radar-hunting Harpy drones that the US believed Israel was upgrading for Beijing. The Harpy, manufactured by Israel Aircraft Industries, was sold to China in 1999. Some were returned to Israel for routine maintenance, but the US believed they were being upgraded. The US is opposed to China having these advanced weapons because they could be used against American forces or its ally, Taiwan, in a possible future conflict.