At a news conference in Washington, Condoleezza Rice blasted Israel for hi-tech arms sales to China. Israel "has a responsibility to be sensitive" to US concerns, she said, adding that American officials have had "difficult" discussions with the Israelis regarding the weapons sales. "I think they understand now the seriousness of the matter," she said. Rice said the US is increasingly concerned about the military modernization of China, which could upset the balance of power in Asia. Israel says the issue will be resolved soon. "We are not acting against the United States and we are not competing with it either,” Vice Premier Shimon Peres told Israel Radio. “I am sure we can reach an agreement."