JERUSALEM Israel is in talks to build the wings for about a quarter of the United States's new F-35 stealth fighter aircraft, an Israeli official said on Monday.
Lockheed Martin currently plans to build some 3,200 F-35s costing about $96 million each.
An Israeli official who declined to be named said state-owned Israel Aerospace Industries would build the wings.
"We are in advanced talks for the IAI to produce around 800 sets of wings," he told Reuters.
Lockheed Martin declined to comment on the details of a possible deal involving the aircraft, also known as the Joint Strike Fighter (JSF).
Earlier this month Israeli Defense Minister Ehud Barak approved in principle the purchase of 20 of the radar-evading fighters, in a deal worth $2.75 billion.
Israeli and U.S. officials expect final approval of that deal by the end of September. The planes would be delivered in 2015-2017. The cost of the purchase would be covered by an annual U.S. defense grant of $3 billion.
Israel would be the first foreign country to sign an agreement to buy the F-35 outside the eight international partners that have helped to develop the plane.
Israeli and U.S. officials with knowledge of the deal said Israel has an option to buy a further 55 aircraft.
"Israel possibly will end up building a significant portion of the F-35," said one U.S. official familiar with the deal.
An Israeli official said reciprocal purchase deals worth $4 billion had been secured for Israeli companies for their participation in the plane's manufacture and might be increased to $5 billion although it would be conditional on Israel exercising its option to buy the additional 55 planes.
The F-35 is designed to avoid detection by radar and could play a role in any Israeli effort to knock out what it regards as the threat to its existence posed by Iran's nuclear program. Tehran denies Western and Israeli allegations that it is trying to produce atomic weapons.
(Writing by Ori Lewis; Editing by Douglas Hamilton)