U.S. satellite-makers like Raytheon Corp. and Lockheed Martin have reportedly succeeded in convincing the U.S. administration to ease export rules so they can compete with European firms to sell spy satellites to the United Arab Emirates.

The Intelligence Online Web site in Paris said that Raytheon "quietly entered the race to win the highly strategic contracts for a new military observation satellite" in recent months.

That puts it in direct competition with the European aerospace giant European Aeronautics Defense and Space Co., which has been negotiating with the Emirates for two years.

The new negotiations involved the two contenders "are being followed closely by Saudi Arabia and Qatar, both of which are looking to equip themselves with surveillance satellites," Intelligence Online reported.

The winner of the Emirates deal will likely be well placed to secure similar deals with other Persian Gulf monarchies, all of the key allies in the U.S. confrontation with Iran in the region over Tehran's contentious nuclear program.

The Obama administration has been steadily building up U.S. forces, primarily naval and air power, the gulf and its environs for several months but it has also been supplementing that by funneling advanced weapons and electronic systems into the gulf monarchies as well.

Raytheon already sells Patriot air-defense missile systems to the Emirates.

Lockheed signed a $3.48 billion deal for two batteries of its Terminal High Altitude Area Defense missile system Dec. 25, 2011, including two Raytheon AN/TPY-2 long-range radars and 96 interceptors.

The Emirates had sought four batteries, with 144 interceptors and four radars for $6.9 billion but cut that back in 2010.

The deal marked the first foreign sale of THAAD and underlined U.S. efforts to beef up Arab defense capabilities in the gulf as tensions mounted with Iran over its expansionist policies in the region.

The Americans find themselves up against stiff European opposition on the satellite competition. EADS' Franco-German aerospace subsidiary, Astrium, and Thales Alenia Space of Cannes, France, owned by Thales Aerospace of France and Finmeccanica of Italy, have an edge.

Astrium built the Emirates' Yahsat series of communications satellites used by the gulf state's military forces, with funding from the sovereign fund run by the Mubadala Development Co., based in Abu Dhabi, the oil-rich economic powerhouse of the seven-member federation.

The Emirates has established itself as the space technology hub in the region and has had dealings with foreign companies that specialize in military satellites.

The gulf state, a regional leader in the telecommunications sector, launched its first satellite, the 419-pound DubaiSat-1, July 29, 2001, from the Baikonur Cosmodrome in Kazakhstan, former center of the Soviet space program.

On April 24, 2011, the Emirates launched its fifth communications satellite into orbit, the first to provide secure and independent telecommunications for its armed forces amid a drive by Arab states in the gulf to boost their military capabilities against Iran.

The Emirates' Y1A satellite was launched from the European Space Center in Kourou, French Guiana, atop an Ariane 5 rocket. It was built by Yahsat, the Emirates-based Al Yah Satellite Communication Co., a wholly owned subsidiary of Mubadala Development.

Mubadala, the Abu Dhabi government's investment arm, is heavily involved in the Emirates' drive to build up its defense industry.

A second satellite, Y1B, was launched from Baikonur April 24, 2012, completing the $1.6 billion Yahsat program to provide commercial communications across the Middle East, Africa, South West Asia and Europe.

The emirates spearhead efforts by the six members of the Gulf Cooperation Council -- the Emirates, Saudi Arabia, Kuwait, Qatar, Oman and Bahrain -- to acquire their own military surveillance satellite network to bolster the early warning system they've been seeking to develop for several years -- and talking about for a decade.

But, largely due to dynastic squabbles within the alliance established in 1982 at the height of the 1980-88 Iran-Iraq war, this and other GCC military aims remain unfulfilled.

However, the growing tension between the GCC and Iran could provide the spur for them to set aside their differences and work together to develop their common military capabilities, and lessen dependence on the United States for early warning.