JERUSALEM - Israel plans to sell advanced military equipment to Azerbaijan in a deal worth $1.6 billion, according to Israeli media.

The deal will include unmanned aerial vehicles (UAVs), as well as anti-aircraft and missile defense systems. Both the type of equipment and its destination are likely to generate a negative response from Iran, which recently accused Azerbaijan of allowing Israeli spies to conduct operations against the Iranian nuclear program within its territories.

Iran says its nuclear program is for generating electricity, while Israel and many Western countries argue that it is a cover for producing nuclear weapons.

Analysts told Xinhua that while the deal would strengthen Azerbaijan's ties with Israel and probably aid its ambition to gain closer ties with the West, there is a long history of tensions between Azerbaijan and Iran even without the Israeli dimension.

"The ties with Azerbaijan heightens the isolation and encirclement of Iran, which in turn serve as a precursor to ultimately target its nuclear facilities militarily," Barak Seener from the Royal United Services Institute in London told Xinhua on Monday.

Israel sees a nuclear-armed Iran as an existential threat. It also has concerns that Iranian allies, the Islamic Hamas movement and Hezbollah, would achieve greater deterrence against Israel under an Iranian nuclear umbrella.

Seener argued that Israel has so far been focusing its efforts on dealing with the nuclear issue by targeting scientists connected to the program and by engaging in cyber warfare. In the last six months there have also been explosions at sites that may be connected to the program, which have resulted in both loss of life and extensive damage.

While Israel has never commented on these allegations, several high-level officials have expressed their satisfaction over the results of these attacks.

However, Seener believes that "Israel could have engaged much more with the Iranian opposition in destabilizing the regime from within and has failed to do so."

"It has instead focused on creating an external network of alliances to isolate the (Iranian) regime and ultimately target nuclear facilities," he added.

Dr. Soli Shahvar from the University of Haifa said that the deal is important to Israel as the strong ties with Azerbaijan will to some extent work as a counterweight to the influence that Iran yields over Hamas in Gaza or Hezbollah in Lebanon.

"Of course, Israel can't operate with the Azerbaijani government in the same fashion that Iran can do with Hezbollah and Hamas, but there is some kind of cooperation," Shahvar said.

"Azerbaijan is seen by Iran as one major component in a strategic axis against its interests in the region, so this in itself brings tension," he added.

Shahvar said that although Azerbaijan is viewed as secular, Iran identified it as one of the countries that it would strive to export its model of Islamic government due to its large Shiite population.

But the efforts failed, and in the early 1990s Iran angered Azerbaijan by supporting Christian Armenians in the war over the Nagorno-Karabakh region, an enclave inside Muslim Azerbaijan.

"Another point of tension between Azerbaijan and Iran is how the natural resources under the Caspian Sea should be divided," Shahvar said.

According to the old agreement that Iran reached with the Soviet Union, the resources should be split 50-50. However, after the collapse of the Soviet Union a number of new nations emerged and all wanted the oil.

While Iran argued that it was up to these new nations to divide the half that belonged to the Soviet Union, no final agreement has been reached.

Shahvar argued that while the tension with Israel is important to Iran, the struggle for control of the Caspian Sea oil is even more important.

Oil and natural gas exports are the main sources of income for the Iranian government. The new and tougher sanctions recently imposed by the United States and the European Union also targeted Iran's oil industry.