Defense Minister Shaul Mofaz was to have signed a memorandum of understanding this week in Washington with the Americans that would have ended the rift over Israeli defense sales to China. But Mofaz postponed his trip at the last minute to deal with the escalating violence with the Palestinians. Defense officials said Mofaz, who planned to fly to Washington on Saturday night, will likely reschedule his visit for later this week, possibly as early as Monday. The delay had nothing to do with any last-minute difficulties in the wording of the memorandum, defense officials said. Israel and the United States are working feverishly to finalize the understandings to prevent future rifts over Israeli technology exports to China. Defense officials said that the memorandum is virtually wrapped up. The understanding effectively gives American veto over Israeli arms sales to selected countries if Washington feels its national security is compromised. The Pentagon would remove all restrictions on strategic and industrial cooperation that Washington has imposed due to suspicions over Israeli-China defense trade. The wording of the memorandum was hammered out by a delegation from the Defense Ministry headed by former air force commander Major-General (ret.) Herzl Bodinger, together with Brigadier-General (ret.) Zvi Shtauber, a former ambassador to Britain and currently head of the Jaffee Center for Strategic Studies. Israeli officials have put a positive spin on the memorandum, saying it will allow upgraded technological cooperation with the United States. When he eventually travels to the US, Mofaz is to meet Secretary of Defense Donald Rumsfeld at the Pentagon for the official signing ceremony. According to defense sources, Israel has promised the Americans that it is revamping its export review process to ensure greater transparency. The new procedures will include consultations on sales that the United States could perceive as threatening their national security interests. Israel has also 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. According to defense sources, Israel will come out of the ordeal with much-restricted maneuverability regarding arms sales to third parties. But it will also allow the United States to lift the freeze on Israeli involvement in crucial projects like the F-35 Joint Strike Fighter. The latest crisis with the Pentagon revolves around the radar-hunting Harpy drones that the United States believes Israel is currently upgrading for Beijing. Israel sold China the Harpy, manufactured by Israel Aircraft Industries, in 1999. Some were returned to Israel for routine maintenance, but the United States believe they are 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 showdown. Israel does not expect the United States to compensate Israel for losing its Chinese arms market. Any penalties that may need to be paid to Beijing will likely come from the Israeli taxpayer.