DATE=7/31/98 TYPE=CORRESPONDENT REPORT NUMBER=2-236329 TITLE=ISRAEL / ETHIOPIA / ERITREA (L ONLY) BYLINE=AL PESSIN DATELINE=JERUSALEM CONTENT= VOICED AT: INTRO: ISRAEL SAYS ITS PROGRAM TO UPGRADE ETHIOPIAN FIGHTER JETS WILL NOT BE FINISHED FOR ANOTHER YEAR -- AND ISRAEL SAYS IT HOPES THE ETHIOPIA-ERITREA CONFLICT WILL BE OVER BY THEN. V-O-A'S AL PESSIN REPORTS FROM JERUSALEM. TEXT: A DEFENSE MINISTRY STATEMENT SAYS THE PROGRAM TO UPGRADE ETHIOPIAN MIG-21 FIGHTERS IS A LONG-TERM PROJECT AND WILL NOT BE COMPLETED FOR ABOUT ANOTHER YEAR. THE MINISTRY SAYS IT IS CAREFULLY WATCHING THE ETHIOPIA-ERITREA CONFLICT TO ENSURE NOTHING ISRAEL DOES WILL HAVE ANY IMPACT ON IT. THE REUTER NEWS AGENCY QUOTES AN UNNAMED ISRAELI DEFENSE OFFICIAL AS SAYING SPECIFICALLY THAT THE UPGRADED AIRCRAFT WILL NOT BE DELIVERED UNTIL THE DISPUTE IS RESOLVED. THE ISRAELI NEWSPAPER HA'ARETZ SAYS THE PROJECT INVOLVES 11 PLANES, WHICH, IF UPGRADED AND DELIVERED BACK TO ETHIOPIA, WOULD SIGNIFICANTLY CHANGE THE BALANCE OF FORCES IN THE CONFLICT. ETHIOPIA AND ERITREA FOUGHT AN INTENSE FIVE-WEEK WAR IN MAY AND JUNE OVER DISPUTED BORDER TERRITORY, IN WHICH BOTH GROUND FORCES AND AIRCRAFT WERE USED. ISRAEL HAS GOOD RELATIONS WITH BOTH COUNTRIES, INCLUDING SECURITY COOPERATION. THE AUTHORITATIVE PUBLICATION JANE'S DEFENSE WEEKLY, SAYS ISRAEL HAS TWO BASES IN ERITREA -- ONE ON A RED SEA ISLAND TO SUPPLY SUBMARINES AND EAVESDROP ON NEIGHBORING COUNTRIES, AND ANOTHER ON THE MAINLAND FOR SURVEILLANCE OF SUDAN. JANE'S ALSO REPORTS ISRAEL HAS A LARGE INTELLIGENCE OPERATION IN ETHIOPIA. ISRAELI OFFICIALS WILL NOT COMMENT ON SUCH REPORTS. ISRAEL IS ALSO INVOLVED WITH ETHIOPIA ON THE EMIGRATION OF ETHIOPIAN JEWS. MOST OF THE ETHIOPIANS THAT ISRAEL RECOGNIZES AS JEWS HAVE ALREADY MADE THE TRIP, BUT THERE ARE OTHERS WHOSE STATUS IS STILL UNDER INVESTIGATION. (SIGNED) NEB/AWP/JWH 31-Jul-98 8:41 AM EDT (1241 UTC) NNNN Source: Voice of America