A one billion dollar deal for the sale of three Israeli-made Phalcon airborne warning and control systems (AWACS) to India hangs in the balance as Bush administration officials have informed Israel of their opposition the transaction. The Americans have taken one step further to tie the imminent Phalcon deal to a one-billion-dollar special military grant promised to their close ally.
India and Israel were close to sealing the long-pending deal, as part of a defense accord between the two countries, when Washington stepped in. While Washington sources claim US objections to the deal are based on fears that it could increase tensions with Pakistan in the subcontinent, New Delhi papers have linked the American position to the Indian stand on the Iraq war.
In Israel, claims were voiced that American displeasure with the proposed sale was based on commercial competition considerations. The Indian defense ministry has not yet received any official communication from Israel on a possible cancellation of the Phalcon deal and officially the deal is still under negotiation.
A Pentagon veto soured Israel's relations with China in August 2000, when an American objection was raised due to concern that the planes might threaten US security, against a backdrop of mounting tensions between China and Taiwan. The Phalcon system includes American components and under a production agreement, Israel must obtain Pentagon approval for sales to third countries. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
