Understanding Israeli Nukes

In all the hullaballoo of the ISG etc, this little story is worth noting:

During his Senate confirmation hearing on Tuesday, Gates speculated on why Iran might be seeking the means to build an atomic bomb. "They are surrounded by powers with nuclear weapons: Pakistan to their east, the Russians to the north, the Israelis to the west and us in the Persian Gulf," he said.

The statement led Israeli news bulletins, with some pundits suggesting that former CIA chief Gates may have breached a U.S. "don't ask, don't tell" policy dating back to the late 1960s...

A retired Israeli diplomat, speaking to Reuters on condition of anonymity, called the testimony "quite unprecedented" and added: "I can only assume he has yet to get to grips with the understandings that exist between us and the Americans."

Why is this story important?

By not declaring itself to be nuclear armed, Israel ... skirts a U.S. ban on funding countries that proliferate weapons of mass destruction. It can thus enjoy more than $2 billion in annual military and other aid from Washington.

If Bush is serious about making changes in the Middle East, this would be a good place to start. Maybe Gates is leading the way?