No India-Israel deal on Arrow anti-missile system in near future: source
Agence France Presse, September 9, 2003

An Indo-Israeli deal for the Israeli-designed Arrow anti-ballistic missile system could be years away over US concerns for its emerging relationship with Pakistan, a senior Israeli source told AFP Tuesday.

Progress, however, has been made on concluding a billion-dollar deal for the supply by Tel Aviv to New Delhi of Phalcon radar systems, other officials said.

Israel and India are waiting for US permission for Israel to sell its Arrow anti-ballistic missile (ABM) system to New Delhi, which is keen to arm itself against what it perceives as an ever-increasing threat from Pakistan.

A recently formed Indo-Israeli lobby group has been pressuring Washington to facilitate the sale, as it did over the billion-dollar Phalcon AWACS radar deal.

But waiting for the nod from the US administration could take " years," the source said, citing the emerging US relationship with Islamabad.

"It's not going to happen for a long time."

Washington was exercising extreme caution in deals that could negatively affect its emerging relationships with Pakistan and China, he said.

"We're not just talking about the technology. This was a jointly-funded project, so there are two sides involved in the decision to sell it on," he said. "The decisions are complex."

Israel's state-of-the-art Arrow interceptor is the only operational purpose-built anti-ballistic missile system in the world.

It was designed as part of Israel's Homa project to counter missile threats from hostile states such as Iran, Iraq and Syria.

From its start in 1988 to its deployment in March 2000, the programme has cost more than 2.2 billion dollars, over half of which was paid for by the United States.

With the Arrow deal a non-starter, top military officials from India and Israel meeting Tuesday on the sidelines of Prime Minister Ariel Sharon's visit to India focused instead on stitching together the Phalcon venture, officials said.

Director-General of the Israeli defence ministry, Major General Amos Yaron met Indian Air Force head, Chief Air Marshal S. Krishnaswamy for talks that lasted for nearly an hour.

"The two sides discussed a series of issues but their talks mainly focused on our requirement for the three Phalcon AWACS systems for which there are no obstacles now," an Indian airforce official said on condition of
anonymity.

Yaron's talks with Krishnaswamy came after an Israeli official accompanying Sharon told reporters here that the long-awaited deal would be signed within weeks.

The Phalcon is an Israeli-developed long-range radar warning and control system carried in a Russian Ilyushin-76 cargo plane.

"It will probably be another couple of weeks because of a couple of bureaucratic lapses, things that have to be worked out," an Israeli official said on condition that he not be named.

The official did not explain further, but Israeli defence sources hinted it was likely the source of the delay was the transfer of source code for the system.

The United States, which had blocked sales of Phalcon to both India and China, gave Israel the go-ahead last month to sign the

Airbourne Warning and Control System (AWACS) deal with New Delhi.

Sharon arrived here late Monday at the head of a high-powered delegation including chief executives of nine major Israeli armaments firms and on Tuesday met his Indian counterpart Atal Behari Vajpayee and others.