Israel, Germany submarine deal advances after corruption probe delay

Germany has resumed negotiations towards selling Israel three submarines after a three-month pause in talks following concern in Berlin over a corruption investigation, Israeli officials said Friday.

In July, Germany put off the signing of a memorandum of understanding following the arrest of several Israelis on suspicion of offences including bribery and money laundering around the deal to buy the Dolphin submarines from German industrial giant ThyssenKrupp.

The corruption investigation, which is still ongoing, involves officials from the Israeli security establishment, as well as people working locally for ThyssenKrupp.

While Germany stressed on Friday that an agreement had not been finalised and signed, Israeli officials implied it was a done deal.

"The Germans have given their approval to the deal," an Israeli official familiar with the issue said on condition of anonymity.

According to the Israeli official, Germany had conditioned the deal on there being no corruption on the behalf of the Israeli decision-makers and senior officials involved.

Housing Minister Yoav Gallant, who was a senior commander in the Israeli navy, "welcomed the German approval" to allow the purchase of the three submarines.

In a tweet, Gallant said the three new submarines would replace three old ones in a decade and bring the number of new submarines at Israel's disposal to six.

Germany, however, stressed that the deal on the three submarines "is not yet signed".

"We had other talks about it, but a deal was not made until now," a spokesman for the German government told AFP.

The submarines ordered by Israel are likely to be equipped with nuclear missiles, but are primarily intended for spy missions off Iran or to attack that country in case of nuclear war, according to foreign military experts.

The "submarines affair" involves not only Israel's decision to buy three new subs from ThyssenKrupp - the supplier of Israel's existing five-strong, nuclear-capable fleet - but the purchase of four patrol ships as well.

In February, Israel's justice ministry said it had launched an investigation into the affair, stressing that Netanyahu himself was not a suspect in the case.

Netanyahu is being investigated separately, reportedly over allegations he and his wife accepted improper gifts from Israeli businessman and Hollywood producer Arnon Milchan.

The Israeli premier is also being investigated over suspicions he sought a secret deal with Amnon Moses, publisher of Israel's top-selling newspaper Yediot Aharonot.

Netanyahu has rejected allegations of misconduct, saying he is the target of a campaign by political opponents.