Spain plans to buy 2,600 ground-to-ground missiles from Israeli firm Rafael in a deal worth 250 million euros (300 million dollars), the El Mundo newspaper reported Monday, although ministers did not confirm the story. Rafael was facing competition from a US consortium of Lockheed Martin and Raytheon and Europe's MBDA, according to El Mundo.

El Mundo also said the Spanish defence ministry had informed the latter two camps the Israelis had got the nod.

"The choice of Rafael is a new reverse for the European defence industry which will complicate, according to MBDA, the Spanish army's interoperational possibilities with the French and German armies, in future European combat missions," said El Mundo, a conservative daily.

The paper quoted military sources as saying the Israeli missile Spike, which can be fired from a distance of four kilometres (2.5 miles) from the target and can be controlled in flight, fulfulled the technical criteria Spain was looking for to a greater degree than those of the rival bidders.