According the reports of Haaretz, negotiations between Israel Aerospace Industries and Moscow on setting up a $300 million-$400 million factory in Russia to produce aerial drones have stalled because Israel government officials are reluctant to provide Moscow with such valuable technology.

The United States, which also has no wish to see the Russians get their hands on such advanced military capability, has also sought clarification on the proposed venture.

State-owned IAI, flagship of Israel's defense industry, also wants to sell Russia an unspecified number of unmanned aerial vehicles following the 2009 sale of a dozen UAVs for some $50 million, the Israel media has reported in recent weeks.

The UAV deal now on the table includes the sale of IAI-manufactured UAVs to Moscow as well. It gave no details on that aspect of the deal, Haaretz reported on Sunday.

But it said that the joint production deal has run into opposition from the Israeli foreign ministry and the office of Prime Minister Binyamin Netanyahu.

The liberal daily has reported, "The sensitive part concerns the transfer of technology to Russia, which despite its attempts has failed to crack the secret of building silent UAVs. While no one is talking about giving the Russians the plans for the most advanced pilotless aircraft in the arsenal of the Israeli (military), a deal would represent a technological advance for the Russians.

Haaretz further reported, "Neither Jerusalem nor Washington wants the technology to end up in the hands of Israel's enemies."

IAI officials declined to comment on the report, presumably because of the sensitivity of the proposed deal and Israel's persistent efforts to persuade Moscow not to provide powerful S-300PMU air-defense missiles to Iran. (With Inputs from Agencies)