U.S. looks to export drone technology to allies

* International pact limits exports of drone technology

* U.S. has so far only sold drones to UK, Italy-Gates

* Terrorists top concerns over spread of drone technology

By Phil Stewart

Defense News: WASHINGTON, March 25 (Reuters) - Defense Secretary Robert Gates said on Thursday he hoped to export coveted U.S. drone technology to allies, despite legal hurdles, and played down the threat from rival drone programs in nations like Iran.

Gates, testifying at a Senate hearing, said it was in the U.S. interest to try to help friendly nations get drone technology, despite limitations on exports imposed by an international pact.

"There are other countries that are very interested in this capability and frankly it is, in my view, in our interest to see what we can do to accommodate them," Gates said.

The drones have proven to be a crucial technological advantage for the U.S. military in Afghanistan and Iraq, allowing it to remotely track and kill insurgents and giving troops eyes-in-the-sky battleground imagery in real time.

The CIA has used drones armed with missiles to ramp up its covert campaign to kill al Qaeda and Taliban targets in Pakistan.

"The reality is so far we have been in situations where (drone) technology cannot be used, or has not been used against our troops anywhere," Gates said.

But that might not remain the case, he said. He cited Iran, which he has said is providing limited support to Afghan insurgents, and which is developing unmanned aerial vehicles, or UAVs.

"Iran has UAVs and that is a concern because it is one of those areas where I suppose if they chose to, in both Iraq and Afghanistan, they could create difficulties for us," Gates said.

Still, he called UAVs "relatively slow flyers" that could be neutralized by the Air Force if they threatened U.S. forces.

"I actually think our ability to protect our troops from these things particularly in a theater of combat like this is actually quite good," he said.

Militant groups, as opposed to other countries, were a bigger concern when it came to the spread of drone technology.

"My worry would be capabilities like this getting into the hands of non-state actors who could use them for terrorist purposes," Gates said.

PENT-UP DEMAND

The U.S. aerospace industry estimated in December that U.S. military demand for unmanned aircraft would double over the next five years after rising 600 percent since 2004. It is also hoping for growth abroad.

The industry wants to change the Missile Technology Control Regime, or MTCR, a pact among at least 34 countries aimed at curbing the spread of unmanned delivery systems that could be used for weapons of mass destruction.

Gates said he shared concerns of lawmakers about the spread of the technology to adversaries and "about these capabilities getting into the hands of those who are our adversaries."

But he also said the United States had only sold UAVs to Italy and Britain so far.

"With respect to export ... I think there are some specific cases where we have allies with whom we have formal treaty alliances who have expressed interest in these capabilities," he said.

"And we have told them that we are limited in what we can do by the MTCR, but I think it's something we need to pursue with them."

Northrop Grumman's Global Hawk, which provides surveillance capabilities, has drawn interest from countries including South Korea, Japan and Singapore as well as Britain, Spain and Canada, a company spokeswoman said in December.

Washington announced plans to give Pakistan surveillance drones but Islamabad also wants shoot-and-kill drones, like the Predator, which may be armed with Hellfire missiles.

(Editing by Eric Beech)