Israeli PM Olmert says the United States pledged to increase military aid to Israel to maintain its advantage in the Middle East. Israel is also expected to allow the first 100 Palestinians stranded for weeks in Egypt to return to the Gaza Strip under a deal rejected by Hamas Islamists. Israeli Prime Minister Ehud Olmert said on Sunday (July 29) that the United States pledged to increase the military aid to Israel in order to maintain its advantage in the Middle East. The comments followed a report on a forthcoming arms deal expected to be signed between the United States and Saudi Arabia. On Saturday a senior U.S. defence official in Washington reported that the Bush administration is preparing a package of arms sales to Saudi Arabia and other Gulf states that could be worth some $20 billion over the next 10 years. The United States has sought to allay Israeli concerns about the package. The senior U.S. defence official said Washington was working on a military assistance deal for Israel expected to top $30 billion during the next decade, a significant increase on current levels. "In addition to the huge increase of the security aid (to Israel) this was a renewed, explicit and detailed commitment to keep Israel's advantage over the arab states. We understand the need of the U.S. to assist the moderate Arab states which are in one front with the U.S. and us in the fight against Iran and on the other hand we appreciate the renewed and re-emphasised support for Israel's military and security advantage," said Olmert at the start of a cabinet meeting in Jerusalem. ""We here are at the forefront of a moderate coalition of nations together with the United States striving for peace and containing terror and being challenge by coalition of evil states and axis of evil, and therefore its sustaining Israel's superiority, military superiority, is an essential interest of this coalition and definitely of the United States" added Israel's Welfare Minister Isaac Herzog. The U.S. official, speaking on condition of anonymity as the deal has not yet been officially announced or completed, said the administration hoped to present the package to the U.S. Congress for approval in the fall. Washington is striving to assure Gulf allies, worried by the growing strength of Iran and war in Iraq, that the United States is committed to the region and will stand by them, with arms sales part of that process, U.S. officials say. The official largely confirmed reports of the deal in The New York Times and Washington Post ahead of a joint trip to Saudi Arabia and other Middle Eastern countries by Secretary of State Condoleezza Rice and Defence Secretary Robert Gates. Also on Sunday Israel was expected to allow the first 100 Palestinians stranded for weeks in Egypt to return to the Gaza Strip on Sunday under a deal rejected by Hamas Islamists. "I think it was the right step because those people who run away from Gaza strip mostly have been identified with the Fatah with Abu Mazen (Palestinian President Mahmoud Abbas), and therefore they run away for their lives. Now that things have been calmed down in the Gaza strip. It is in my opinion quite right to give them possibility to go back into Gaza to their homes and my hope that by this step it creating some kind of quieteness in the Gaza strip" said Israeli Interior Minister Meir from Jerusalem. Palestinian officials estimate that some 6,000 Palestinians have been waiting on the Egyptian side of the border since Hamas seized control of the Gaza Strip from forces loyal to President Mahmoud Abbas's Fatah faction on June 14. The first wave crossing was due to cross into Israel from the Egyptian Sinai and then transport through Israeli territory to a key border crossing with Gaza. Hamas rejected the deal, insisting that Israel allow the thousands of Palestinians stranded in Egypt to use the Rafah border crossing between Gaza and Egypt. Rafah has been closed since June 9, when European Union monitors pulled out of the crossing.