China may demand compensation if the Harpy lethal unmanned air vehicle components already shipped to Israel for upgrade are not returned following successful US calls to halt the work.
Israeli sources say Washington's demand to scrap the deal with Israel Aircraft Industries (IAI) has resulted in a "complicated" situation with far-reaching implications. Israeli industry has now suspended relations with Beijing in response to the crisis, details of which emerged earlier this month (Flight International, 4-10 January).
US opposition to the deal to modify China's existing stock of Harpy anti-radiation UAVs emerged after it received intelligence reports about the first shipments of Harpy subsystems to Israel. China purchased an undisclosed number of Harpy systems in 1994 and US sources say IAI last year was contracted to upgrade them. The improved systems were to receive a datalink to allow ground forces to allocate the loitering drones specific targets.
Earlier US opposition to arms exports to China forced the Israeli government to pay Beijing $350 million in compensation over the scrapped sale of IAI Phalcon airborne early-warning systems.
ARIE EGOZI / TEL AVIV
Source: Flight International
