Germany is "reconsidering" its decision to sell Israel a sixth Dolphin class submarine, Yedioth Ahronoth reported on Wednesday.
According to the report, the move was prompted by the tensions between German Chancellor Angela Merkel and Prime Minister Benjamin Netanyahu and Merkel's frustration over the new housing plans approved in east Jerusalem.
- Merkel questions e. Jerusalem housing plan
Top political sources said that Merkel was irked with Netanyahu, who "gave her the impression that he would be willing to suspend settlement expansion in order to push the Israeli-Palestinian peace talks."
Israel's recent approval of 1,100 housing units in the Gilo neighborhood in Jerusalem led Merkel to announce that Netanyahu "cannot be taken seriously and has no intention of complying with the basic terms needed to renew the negotiations with the Palestinian."
Merkel and Netanyahu shared strident words following the decisions, and relations between Jerusalem and Berlin have been strained since.
Defense officials expressed concern over Berlin's intention to suspend and possibly cancel the submarine sale: According to foreign media reports, the new Dolphin was slated to join Israel strategic fleet.
Earlier in 2011, Germany announced that it would grant Israel a €135 million aid package to build its sixth submarine. German funding has been a significant part in the creation of the Israeli Navy's submarine crops.
The Navy currently has three Dolphin class submarines, and is expected to receive two new ones, currently under construction in Germany. According to foreign media sources, the new submarines will be equipped to carry nuclear warheads.
The deal was originally approved by former German Chancellor Gerhard Schroeder, despite initial concerns that such ballistic capabilities may upset the nuclear balance in the region.
Senior defense officials refused to comment directly, saying only that "The subject of the sixth submarine is currently being negotiation between the (Israeli and German) governments. It is inappropriate to hash the matter out in the media."
The Prime Minister's Office was unavailable for comment.
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