Ha'aretz: Phalcon Talks with India
Put on Hold until New US Administration

By Amnon Barzilai
Ha'aretz Defense Correspondent
Ha'aretz, 28 December 2000

Talks between Israeli and Indian defense officials over the possible sale of the Phalcon airborne radar system to India have been suspended pending the changes in the American administration. Israel is also waiting to see whether China, for which Israel Aircraft Industries (IAI) was in the process of mounting a Phalcon system on a Russian-made aircraft, will find an alternative supplier in Europe.

In talks between Defense Ministry director-general Amos Yaron and Indian officials this year, the Indian air force expressed interest in acquiring two to four early warning aircraft of the type that was being developed for China. The Indian air force also chose the Ilyushin A-50, Russian made transport aircraft, as the platform on which the Phalcon system would be installed. However, in spite of advanced negotiations on the scale of the deal, which is estimated to stand at $500 million, the Defense Ministry decided to put the negotiations on hold for now. Ministry sources say that the main reason for the suspension of the negotiations is the uncertainty regarding the stance of the American administration on the sale of the spy plane to India. The original deal with China was scrapped following intense pressure from the U.S., causing a rift both in relations with Washington and Beijing. As a result, Israel defense officials are wary of committing to a deal with India without an American green light.

Internal discussions at the Defense Ministry also concluded that it would be best to wait for the outcome of talks being held by China and Russia with possible West European partners for the construction of early warning aircraft for the Chinese air force. Israeli sources estimate that British firms will probably join in the manufacture of the AWACS planes for China.

Israeli officials believe that the U.S. will be unable to block the involvement of any West European country in the development of the aircraft for China, arguing, as it did with Israel, of threats to U.S. strategic interests. It is hoped that the American opposition to the sale of the Phalcon abroad will diminish, and that this will pave the way for the sale to India.

(c) 2000 Ha'aretz. All Rights Reserved

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