TEL AVIV, Israel, Nov. 13 (UPI) -- Israel is moving closer to what the Haaretz daily calls "the largest defense deal in Israeli history," buying as many as 75 F-35 Lockheed Martin stealth fighters that will be the country's main weapon to counter the perceived threat from Iran.
Israel made an initial official Letter of Request in July for 25 aircraft, enough to equip one squadron. The Israeli air force plans to order another 50 at a later stage, some of them with vertical takeoff and landing capability.
The Americans were expected "to respond next week" to Israel's initial request for 25 F-35s. "Jerusalem is to reach a final decision by early 2010," Haaretz said, "and there's a good chance a deal will be signed by the middle of the year."
Negotiations about the cost of the aircraft, also known as the Joint Strike Fighter, are continuing "slowly but surely," the newspaper reported.
The Pentagon initially pegged that at $200 million per aircraft, twice or even three times the figure that Israel's military planners had expected. They would like to pay $70 million to $80 million per aircraft.
The U.S. price tag was in part the consequence of the Israelis' demand that they be allowed to install state-of-the-art Israeli-made electronic warfare and communications systems in the export version of the F-35. The Israelis also want to maintain the aircraft themselves.
The Americans initially balked at these demands. But Haaretz said the differences "have significantly narrowed … between the parties."
Israeli officers say that the Defense Ministry and the Pentagon have reached "understandings" on these key issues. The Americans, they said, were giving way on Israel's insistence on using its own electronic systems.
This, however, has affected the pricing by making the aircraft more expensive. But an Israeli source said the final figure will depend on the number of aircraft Israel orders.
Haaretz noted, for instance, that "if the price of 25 aircraft, including many other components, comes to $130 million each, then an order of 75 may lower the per-unit price to $100 million."
Delivery dates remain unclear until the other issues have been settled. But timing is a crucial factor for the Israelis.
They want the single-engine, multirole F-35, the most advanced combat aircraft in the world, to counter the threat posed by Iran's alleged attempts to develop nuclear weapons.
Israel has threatened to mount pre-emptive strikes to knock out Iran's nuclear facilities but wants the fifth generation F-35 so it can phase out its older U.S.-supplied Boeing F-15s and Lockheed Martin F-16s.
The heavy cost of acquiring 75 F-35s is worrying some senior military figures. They argue that it would gobble up most of the military aid package of around $2 billion per year that Israel gets from Washington.
And, they add, the value of having the aircraft diminishes if they can't be operational within two years, when they estimate Iran could have nuclear weapons.
If that's the case, the argument goes, the money earmarked for the F-35s should be spent instead on urgent projects by the army and the upgrading of older aircraft.
If Israel cannot get the aircraft soon, planners fear that Iran will acquire the sophisticated S-300PMU air-defense system from Russia that would immensely strengthen its defenses against air and missile strikes.
The problem for the Israelis is complicated by the fact that if they delay their order other countries that have signed on for the F-35 would move up the priority list.
At present Israel is third on that list after the United States and Britain.
Under the $300 billion F-35 program, Lockheed Martin is developing three radar-evading variants of the new jet, which will replace at least 13 types of aircraft for the 11 nations that have signed up to buy it.
The United States plans to buy 2,443 F-35s for the Air Force, Navy and Marine Corps. The purchases by partner nations will increase the initial production total to around 3,000.
