The newspaper said the electronics equipment, developed by a subsidiary of Israel Aircraft Industries (IAI), was for ``defensive purposes'' but did not provide any further details.

A spokesman for IAI, Israel's biggest defense contractor, declined any comment on the Haaretz report saying such weapons deals were classified.

According to the Haaretz report, it was the first time this particular electronics system, developed by IAI's electronics subsidiary ELTA, had been exported.

The United States sought to block the deal after India conducted five nuclear test explosions in May 1998, promoting neighbouring Pakistan to conduct similar test blasts.

Israel's former defense minister, Yitzhak Mordechai, agreed at the time to freeze negotiations betweenIAI and the Indian Defence Ministry on the deal.But when Mordechai was replaced in December by Moshe Arens, a hawk from Prime Minister Benjamin Netanyahu's Likud party, the negotiations resumed and the contract was recently signed in New Delhi by IAI director Moshe Keret, Haaretz said.

Israeli officials defended the sale by saying the weapons system was defensive in nature and wholly developed in Israel with no US funding or technology.

The system is to be delivered to India within three years. The value of the contract was not given.