Friday, Mar 15, 2002
Israel, China settle Phalcon row
JERUSALEM, MARCH. 14. Ending the dispute over cancellation of an Israeli Phalcon spy-plane sale to China, Tel Aviv has agreed to pay Beijing $350 millions in compensation for scrapping the signed deal in the face of stiff U.S. pressure. The agreement to compensate China, which has apparently further angered with Tel Aviv planning to supply the same spy planes to India, was signed by the Director-General of Israel's Defense Ministry, Amos Yaron with Chinese authorities in Beijing yesterday. The agreement was signed in a friendly atmosphere, with both parties expressing satisfaction and looking forward to fruitful cooperation in the future, English daily Ha'aretz reported today. The cancellation of the deal under stiff U.S. pressure in July 2000, shortly after the Chinese President, Jiang Zemin's visit to the Jewish state, had threatened warm ties between the two countries that had developed since 1992. Washington had contended that the spy plane would give China a strategic advantage over America's AWACS aircraft in any possible conflict over Taiwan. Israel wants to sell three Phalcon Airborne Warning and Control Systems (AWACs) to Indian Air Force and the two sides have been negotiating the estimated $1 billion deal for quite some time now. The Phalcons' radar systems will extend the IAF's range of operation giving India control and monitoring capabilities from the sky. While the total cost of building the plane and its components stands at $260 millions, China had paid Israel $190 millions prior to cancellation. Yesterday's agreement includes reimbursement for the sum already paid by China, 'Ha'aretz' reported. — PTI
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