U.S., Israel close to deal on F-35 fighters

* Deal would cover 19 airplanes

* Decision due “any day”

FARNBOROUGH, England, July 19 (Reuters) - The United States and Israel are days away from reaching an agreement on the sale of 19 Lockheed Martin Corp LMT.N F-35 fighter jets, which would be the first foreign military sale of the new warplane.

“The ball is in their court,” Vice Admiral Jeffrey Wieringa, who heads the Pentagon’s Defense Security Cooperation Agency, told Reuters at the Farnborough Airshow.

“I am waiting for them to make a decision any day,” said Wieringa, who is retiring at the end of the month.

Lockheed declined comment on the status of the arms deal, since it will be concluded between the U.S. and Israeli governments, but said the fact that Israel wants to buy the new F-35 fighter underscored global confidence in the jet.

Analysts say the deal is worth about $3 billion.

“When they select F-35, we believe it’s a testimony to the capabilities of the jet,” Steve O’Bryan, Lockheed’s vice president for F-35 business development, told Reuters, noting that Israel faces some formidable security challenges.

Lockheed said it is close to reaching an agreement with the U.S. government on procurement of a fourth batch of 32 F-35 fighters, and a deal could come “any day.”

Company officials, speaking in interviews and at a news conference, underscored their commitment to working with the Pentagon to continue driving down the cost of the F-35 program -- at over $300 billion the biggest weapons program in history.

O’Bryan said the contract for the fourth batch of airplanes would be 20 percent lower than that of the previous batch of fighters, and half the price of the first batch.

“We think the early signs are encouraging, but there’s a lot of work to do,” O’Bryan said.


Israel would be the first foreign country to sign an agreement to buy the F-35 outside the eight international partners that have helped develop the plane.

The deal has been in negotiations since September 2008, when the Pentagon first approved the sale of 25 fighters with an option for 50 more in coming years.

News of the imminent Israeli deal comes less than a week after Canada, one of the eight development partners, announced that it will buy 65 new fighter jets from Lockheed for C$9 billion ($8.6 billion). [ID:nN16111466]

Lockheed is developing the new F-35 fighter in cooperation with Canada and seven other partner countries: Turkey, Britain, Italy, Norway, Denmark, Australia and the Netherlands.

O’Bryan said both deals were good news for cost-cutting efforts on the $300-billion-plus arms program, since they would increase the economies of scale for the program, which includes many automated production facilities.

Wieringa said the agreement had strong support from top Pentagon and Obama administration officials, who view arms sales as “part and parcel” of U.S. national security policy.

He declined to give any details on what specific radars and other equipment would be included with the F-35 fighters to be sold to Israel, which had expressed concerns early on about lacking access to some critical technologies for the plane.

One source familiar with the discussions said that in the end Israel had been satisfied with the level of technology included in the agreement.

Singapore, Japan and South Korea are also considering buying the Lockheed F-35 fighter to modernize their air forces.

O’Bryan said the United States has also given classified briefings to other countries interested in the F-35 fighter, including Greece and Belgium. Finland and Spain are also interested in the new warplane, he said. (Reporting by Andrea Shalal-Esa, editing by Gerald E. McCormick)