Saudi Arabia and the other Gulf countries are likely to receive as much as $20bn over 10 years, he said.
 
Rice made the announcement hours before leaving with Robert Gates, the US defence secretary, for a joint trip to Egypt and Saudi Arabia to seek the support of Arab nations in stabilising Iraq.
 
"This effort will help bolster forces of moderation and support a broader strategy to counter the negative influences of al-Qaeda, Hezbollah, Syria, and Iran," Rice said.
 
Iran critical
 
Tehran accused the US on Monday of creating fear and causing divisions in the Middle East by announcing the major package of arms deals.
 
"America has always considered one policy in this region and that is creating fear and concerns in the countries of the region and trying to harm the good relations between these countries," Mohammad Ali Hosseini, Iran's foreign ministry spokesman, said.
 
However, Nicholas Burns, the US undersecretary of state, characterised the deals as a continuation of existing policy.
 
"It's not as if we're introducing some new element in the region," he said. "Iran is a factor in this but it wasn't the overriding factor."
 
He said he saw no conflict between the aid packages to Saudi Arabia and Egypt, whose governments have a long record of human-rights abuses, and the current administration's long-term goal of promoting democracy in the region, led by George Bush, the US president.
 
Shared goals
 
Rice said the Bush administration was starting discussions with Egypt for the $13bn military assistance deal which would strengthen Egypt's ability to "address shared strategic goals."
 
"Further modernising the Egyptian and Saudi armed forces and increasing inter-operability will bolster our partners' resolve in confronting the threat of radicalism and cement their respective roles as regional leaders in the quest for Middle East peace and in ensuring Lebanon's freedom and independence," she said.
 
The aid package to Israel steps up annual military support to about $3bn each year from the $2.4bn Israel now annually receives under a 10-year plan negotiated by the administration of Bill Clinton, the former US president, in 1998.
 
Israel visit
 
Burns said he will travel to Israel next week to conclude the agreement. He said the final amount for the Saudi and Gulf states arms package was still being negotiated, although he expected it to be in the billions.
 
A final package with a firm price tag will be presented to congress in September, he said.
 
Bahrain, Kuwait, Oman, Qatar and the UAE are also expected to benefit but no details have been given.