Israeli Prime Minister Ariel Sharon sent a letter in July to Chinese President Jiang Zemin informing him that Israel would not reconsider its decision to halt the sale of a sophisticated radar system to Beijing. Israel will begin negotiations with China in the “near future” on how to compensate China for the cancelled contract, Israeli Ministry of Defense spokesman Shlomo Dror said during an August 28 interview.
In July 2000, under pressure from the United States, then-Israeli Prime Minister Ehud Barak stopped the sale of the radar system, known as the Phalcon. Chinese acquisition of the system would have given Beijing its first advanced airborne early-warning capability, which the United States feared could help tip the Taiwan Strait military balance in China’s favor.
But Barak did not actually cancel the deal. Instead, an Israeli spokesperson said that Israel would “continue to look for ways to implement the deal in understanding with the United States if the circumstances…change.” The Bush administration, however, rebuffed the idea of reversing U.S. opposition when Israeli officials broached the issue, leading Sharon to send his letter.
Sharon’s letter expressed “regret” for having to cancel the deal, Dror said. The spokesman added that Israel wants to maintain good relations with China and still considers U.S. opposition to the sale a “mistake” because it thinks Beijing will obtain a similar capability from another supplier, such as Russia or France, or will develop comparable technology on its own.