Meanwhile, dozens of slogan-chanting activists scuffled with police while trying to push their way into parliament, demanding legislators scrap the bill.

The protestors also demanded the ouster of Stephen Young, the de facto US ambassador to Taipei, after he sternly pushed for Taiwan's parliament to approve the bill.

The defense ministry said Tuesday the result was "regrettable". It marked the 62nd time the bill has been shot down.

The ministry defended the bill saying "it is by no means aimed at an arms race with the Chinese communists. Rather it is intended to build up a reliable self-defense force, thus laying a solid foundation of safety and peace for our offsprings into the next decades."

It also called attention to China's timeframe of "solving the Taiwan problem" by 2020.

Young, director of the American Institute in Taiwan, had warned, "the United States is watching closely and will judge those who take responsible position as well as those who play politics on this critical issue."

In what opposition legislators described as an "ultimatum" to Taipei, Young said: "Taiwan needs to pass the robust defense budget in this fall's legislative session."

China has repeatedly threatened to invade Taiwan should the island declare formal independence. The island and Chinese mainland split in 1949 at the end of a civil war.

The arms bill called for the purchase of eight conventional submarines and 12 P-3C aircraft. The six PAC-3 Patriot anti-missile systems as well as upgrades of the existing three PAC-2 Patriot systems included in the original bill would be financed by the government's yearly budgets.

The arms package has repeatedly been blocked by Taiwan's legislature even though it was scaled down from the original 16 billion dollars.

Some opposition lawmakers say Taiwan cannot afford the arms while others say the submarines would be delivered too slowly to enable the island to keep pace with China's military build-up.

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