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January 24, 2003

What doesn't alarm the Arabs? Microsoft deal with Israel alarms Arabs

TEL AVIV — Israel has signed a $20 million contract with Microsoft Corp. in a move that has alarmed Arab states.

Microsoft Israel, a subsidiary, signed a 100 million shekel [$20.2 million] contract for the supply of services, programs and support for computers in the Defense Ministry and military.

Arab diplomatic sources said the contract has sparked rumors that Microsoft is helping Israel crack the computer systems of the militaries of its neighbors. An estimated 50 million people use Microsoft in the Middle East and the company has 29 offices in the region, according to Middle East Newsline.

The contract will last three years and was financed by U.S. military aid to Israel.