The US Supreme Court on Monday refused to take sides in a dispute between the Pentagon and aerospace giants Boeing and General Dynamics over a canceled contract to build a stealth aircraft.

After a 20-year court battle, the Supreme Court justices ruled unanimously that the Pentagon had the right to withhold sensitive evidence as "state secrets" it wants to prevent from being presented in court before a judge.

"Neither side will be entirely happy with the resolution we reach today," read the opinion, as it confirmed "the valid assertion of the state secrets privilege."

McDonnell Douglas — since bought by Boeing — and General Dynamics had worked for three years designing and building the A-12 Avenger stealth fighter jet that could be used aboard an aircraft carrier, when the Pentagon canceled the contract in 1991 claiming they had failed to meet the terms of the $4.8 billion contract.

The Pentagon also demanded a $1.3 billion reimbursement from the builders.

But the firms said they could have met the contract requirements if the Air Force had given them access to technology developed in the design of another stealth aircraft, and sued the Pentagon for $1.2 billion in damages.

The Department of Defense, however, said the stealth technology was a "state secret" vital to national security, and the manufacturers could not discuss it in a court case.

The Supreme Court ruling means the parties must relaunch their cases if they seek to pursue them through the legal system.

In a statement, Boeing declared victory.

"We are pleased with today's win in the Supreme Court and the court's unanimous decision to overturn the government's default termination of the A-12 program. It has always been our view that the default termination was improper," it said.

earlier related report

Russian minister delays Israel trip after 'spy' row
Jerusalem (AFP) May 23, 2011 –

Russia's Emergencies Minister Sergei Shoigu has postponed a planned visit to Israel after the expulsion of the Jewish state's military attache to Moscow, state television reported on Monday.

Shoigu, who was scheduled to land in Tel Aviv on Sunday to sign cooperation accords, informed his Israeli counterpart Matan Vilnai of an indefinite postponement because of a "change in his schedule," it said.

Russia's foreign ministry said Friday that Israel's military attache, Soviet-born army colonel Vadim Leiderman, was "caught red-handed" on May 12 trying to receive "secret information" on Russia's arms deals with Arab states.

Israel's army and its defence minister insisted the accusation of spying was "unfounded".

His expulsion sparked protests in Israel and was the first such incident between the two countries in two decades.

Russia and Israel enjoy close economic ties based on the Jewish state's vast ex-Soviet diaspora.

But Russia is also a key arms supplier to the Arab world and continues to sell advanced missile systems, notably Yakhont anti-ship missiles, to Syria, with which Israel is technically at war.

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