US forces Israeli firm to back out of IAF jet bid: report

Under pressure from the Pentagon, the Israeli Defense Ministry has ordered Israel Aerospace Industries to back out of the deal as America expressed concern that its technology, used by Israel, would be integrated into the Gripen jets to be offered to India, 'The Jerusalem Post' reported.

"The stated concern was that Western technology in Israeli hands would make its way to the Indians," an unnamed Israeli official was quoted as saying.

But, what was strange with the American request was that Boeing and Lockheed Martin -- the two largest US defense contractors -- are also competing for the 120 aircraft deal, which is estimated at a whopping USD 12 billion.

For this reason, Israeli officials said it was more likely that the Americans were concerned that if IAI competed for the deal with Swedish aerospace company, Saab, it would force the American companies to lower their prices.

A multi-role fighter, the Gripen, is in service in Sweden, the Czech Republic, Hungary and South Africa. IAI was supposed to provide the electronic systems -- communications, radar and electronic-warfare -- for the plane.

This is not the first time that an Israeli company has been forced out of a deal because of US pressure. Last summer, the Israel Military Industries was ordered to back of a bid for a half-a-billion dollar deal to develop a new tank for the Turkish Armed Forces.