The USA has asked Israel to freeze all arms sales to India, including the Israel Aircraft Industries (IAI) Phalcon airborne early warning (AEW) system. This is believed to have come as a result of Washington's revised policy towards Pakistan in the aftermath of the war in Afghanistan.
Israeli sources say the US request is "surprising and worrying" and that it is a gesture of thanks to Islamabad for its role in the war. The USA says the request is part of efforts to reduce the tension between India and Pakistan.
The development comes only a few months after India received Israeli guarantees that the proposed deal for three Phalcon systems would not be hindered by the USA. A senior Israeli delegation visited New Delhi last November in an effort to conclude negotiations in the $1 billion deal.
The proposed Phalcon purchase is part of growing defence links between India and Israel. Other potential deals include helicopter upgrades, IAI unmanned air vehicles - including the anti-radar Harpy - and Rafael air-to-air missiles such as the beyond-visual- range, radar-guided Derby.
Meanwhile, the first round of talks between China and Israel to settle their on-going Phalcon dispute have ended in failure. China wanted four Phalcon systems in a $1 billion deal, and a Beriev A-50 (modified Ilyushin Il-76) was delivered to TelAviv to become an AEW platform. The USA stepped in and pressurised Israel to renege on the contract in 2000.
During talks in Beijing earlier this month, China rejected the Israeli compensation offer and insisted on the full $2 billion that it demanded last month (Flight International, 1-7 January). Beijing had handed over around $200 million by the time the contract was abandoned. Israel was expecting a compensation claim of around $500 million.
Source: Flight International
