The Reagan Administration will not permit American companies to sign long-term contracts with the Israel Air Force in connection with the Lavi fighter plane project which Washington wants Israel to abandon, Haaretz reported Sunday.
The U.S. maintains there is no point in entering long-term contracts while Israel examines alternatives to the Lavi which have been proposed by the Pentagon. The Lavi, a prototype of which had its first test flights last month, is Israel’s second generation jet combat aircraft.
It is financed by U.S. military grants, but the Pentagon insists production costs would be excessive. Haaretz noted that the Americans argue that if Israel chooses an alternative to the Lavi, contracts entered into would have to be cancelled, requiring compensation for the American companies that would only add to the cost of the project.
According to Haaretz, the American move has no practical significance at this stage and does not affect continuing work on the Lavi.
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