The aid packages to Israel and Egypt are further along. A US-Israel agreement, to replace a 10-year arrangement that expires this year, has been under discussion since February, US officials said. The new US package will include strictly military aid and would expand the US contribution 25 per cent over the current $2.4 billion per year; economic assistance has been discontinued now that Israel is considered a developed economy, US officials said.

President Bush said last month, after meeting with Israeli Prime Minister Ehud Olmert, that he was strongly committed to a new 10-year agreement that would increase US assistance “to meet the new threats and challenges (Israel) faces.” Washington has long promised to help Israel sustain a so-called “qualitative military edge” over other major powers in the region.

Rice is expected to announce that, after her Middle East trip, Undersecretary of State R. Nicholas Burns will finalise the agreements with Israel and Egypt.