<P> On April 18, 1988 Reagan authorized Operation Praying Mantis, a one - day naval strike against Iranian naval ships, boats, and command posts in retaliation for the mining of a U.S. guided missile frigate . One day later, Reagan sent a letter to the Speaker of the House of Representatives and the President Pro Tempore of the Senate . (3) USS Simpson (FFG - 56) is mentioned in firing on Iranian F - 4 Phantom II Fighters built by the United States . </P> <P> Israel was granted "major non-NATO ally" status in 1989, giving it access to expanded weapons systems and opportunities to bid on US defense contracts . The United States maintained grant aid to Israel at $3 billion annually and implemented a free trade agreement in 1985 . Since then all customs duties between the two trading partners have been eliminated . However, relations soured when Israel carried out Operation Opera, an Israeli airstrike on the Osirak nuclear reactor in Baghdad . Reagan suspended a shipment of military aircraft to Israel, and harshly criticized the action . Relations also soured during the 1982 Lebanon War, when the United States even contemplated sanctions to stop the Israeli Siege of Beirut . The US reminded Israel that weaponry provided by the US was to be used for defensive purposes only, and suspended shipments of cluster munitions to Israel . Although the war exposed some serious differences between Israeli and US policies, such as Israel's rejection of the Reagan peace plan of 1 September 1982, it did not alter the Administration's favoritism for Israel and the emphasis it placed on Israel's importance to the United States . Although critical of Israeli actions, the United States vetoed a Soviet - proposed United Nations Security Council resolution to impose an arms embargo on Israel . </P> <P> In 1985, the US supported Israel's economic stabilization through roughly $1.5 billion in two - year loan guarantees the creation of a US--Israel bilateral economic forum called the U.S.--Israel Joint Economic Development Group (JEDG). </P> <P> The second Reagan term ended on what many Israelis considered to be a sour note when the United States opened a dialogue with the Palestine Liberation Organization (PLO) in December 1988 . But, despite the US--PLO dialogue, the Pollard spy case, and the Israeli rejection of the Shultz peace initiative in the spring of 1988, pro-Israeli organizations in the United States characterized the Reagan Administration (and the 100th Congress) as the "most pro-Israel ever", and praised the positive overall tone of bilateral relations . </P>

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