Israeli Defence Minister Shaul Mofaz and US Secretary of Defence Donald Rumsfeld discussed the matter in Washington on Friday, the ministry said on Sunday.

The decision to bring Israel back into the project was the latest sign that the two countries had mended relations strained by Israel's since-abandoned plan to upgrade drone aircraft sold earlier to China.

The Pentagon regards China as a potential long-term adversary, and as part of the spat, the Pentagon restricted Israel's access to the Joint Strike Fighter programme, which is to create a fighter to replace the F-16 for the United States, Israel and several European countries.

In August, the two countries announced an understanding resolving the dispute, which requires Israel to inform the United States in advance about possible arms sales to China.

The fighter programme is worth an estimated $50 million to Israeli defence contractors.