U.S. officials say they are worried that a strong Iraqi air force with offensive weapons systems would alarm Iraq's neighbors. Saddam Hussein invaded Iran in 1980 and Kuwait a decade later.
Even nine years after Saddam was toppled in the 2003 U.S. invasion, Saudi Arabia and its Sunni Muslim allies in the Persian Gulf remain deeply suspicious of Shiite-majority Iraq and its Shiite leader, Prime Minister Nouri al-Maliki.
As it is, even Iraq's rebellious Kurds, whom Saddam massacred with genocidal ferocity for decades, have deep concerns about the weaponry Baghdad seeks.
Rampant official corruption in Iraq, particularly when it comes to big-ticket defense contracts, and the continuing threat of sectarian bloodletting are other factors behind American wariness in giving Iraq state-of-the art weaponry.
But even so, Baghdad's air force shopping list is good news for potential U.S. contractors that include BAE Advanced Systems of Greenlawn, N.Y., the Boeing Corp. of Seattle, Northrop-Grumman Electro-Optical Systems of Garland, Texas, and its Electronic Systems division of Baltimore, General Electric Aircraft Engines of Cincinnati, and Raytheon Co. of Lexington, Mass., and Goleta, Texas.
Northrop Grumman Electronic Systems received an $87.8 million order through the Pentagon's Foreign Military Sales program for 43 AN/APG-68v9 radar systems, most of which will go to Iraq, in March. These are the most modern radar systems available for the F-16 variants being produced.
Iraq is also acquiring 100 supersonic AIM-9L/M Sidewinder heat-seeking, air-to-air missiles and 150 medium-range AIM 7M/H Sparrow radar-homing missiles. Both are manufactured by Raytheon.
Iraqi military sources say the Pentagon wouldn't sell Baghdad the latest version of the Sidewinder, nor Raytheon's AIM-20 all-weather, beyond visual range Advanced Medium-Range Air-to-Air Missile -- AMRAAM -- which has replaced the Sparrow with the U.S. Air Force.
The AIM-9L/M-8/9 that Washington is prepared to sell Baghdad is a generation behind the AIM-9X in service with the U.S. Air Force.
It's probably capable enough of handling most regional hostile aircraft Iraqi fighter pilots are likely to tangle with, although the Americans are increasingly making top-line weapons systems available to Saudi Arabia and the United Arab Emirates whose fighters will likely bear the brunt of any dogfighting with Iranian jets in ant future conflict in the Persian Gulf.
Iraq's also interested in buying 24 F100-PW-229 or F110-GE-129 Increased Performance jet engines. The U.S. Defense Industry Daily reports "strong signs that the initial buy will be the F-100-PW-229s from Pratt and Whitney."
Baghdad ordered 18 F-16IQ Block 52 fighters -- enough for one operational squadron -- with training and weapons from Lockheed Martin's Fort Worth, Texas, assembly plant in September 2011 for $4.2 billion after months of delays.
These were the first frontline combat aircraft for the nascent postwar air force, whose predecessor under Saddam had been one of the strongest in the Middle East.
In its heyday, before the Iraqi military was savaged by U.S.-led allied forces in Operation Desert Storm in 1990-91, the air force had some 500 combat aircraft.
In December 2011, Baghdad ordered a second batch of 18, plus weapons, worth around $2.3 billion -- first time sales are always more expensive than subsequent buys.
However, according to Defense Industry Daily, the F-16s Iraq will get are below the standard of F-16s delivered to U.S. allies in the Middle East and Asia.
That underlined Washington's wariness, which has undoubtedly increased since U.S. forces completed their withdrawal from Iraq in mid-December, in providing Baghdad top-line systems.
Maliki's dictatorial tendencies, which intensified since the pullout, have fueled fears the crackdown on political rivals he launched even as the last U.S. troops were leaving and his all-encompassing control of the defense and security ministries will trigger another round of sectarian warfare.
Iraq's first F-16 squadron -- it eventually wants six, equipped with up to 96 F-16s -- will likely become operational until around 2014-15.
The first batch of Iraqi pilots is training in Tucson with the 162nd Fighter Wing, an Air National Guard unit, which specializes in training foreign pilots.