The State Department defended a prospective deal to equip Jordan (search) with high-tech air-to-air missiles and cautioned Israel not to build 600 new homes at a large Jewish settlement on the West Bank (searchalongside Jerusalem.

As Israel looks to Congress to block the deal to upgrade the firepower of Jordanian jets, department spokesman Adam Ereli praised the Arab kingdom and said the United States would be careful to maintain Israel's military edge over the combined forces of Arab nations.

"We certainly appreciate all that Jordan has done to contribute to regional stability, including its support for a stable, secure and democratic Iraq, as well as its efforts to foster peace between Palestinians and Israel," he said in defense of a weapons sale.

Jordan has fought alongside Arab nations in all the wars against Israel except the 1973 war. In 1996, under the late King Hussein (search), Jordan signed a peace treaty with Israel.

This is the first time Israel has tried to prevent Jordan from buying U.S.-manufactured arms since the signing.

Ereli called the deal a potential one, and said the administration had not formally notified Congress of a plan to go ahead.

On another front, the State Department said the 600 housing units the Israeli defense minister has approved for Malleh Adumim are a form of settlement activity that Israel promised to end when it approved a U.S.-backed road map for negotiations with the Palestinians.

"We look forward to Israel abiding by that commitment and sticking by the road map," Ereli said.

Even expanding settlements to account for "natural growth" among the Jewish families that live on them is ruled out by the road map, Ereli said.

American diplomats also have reminded Prime Minister Ariel Sharon that unauthorized outposts must be removed from the West Bank, the spokesman said.