NEW DELHI, 23 May 2003 — India and Israel are heading toward collaboration for the development of a ballistic missile defense system, based on Israeli technology.

Even though no official confirmation was available, sources indicate that negotiations are at an advanced stage.

The United States has dropped its objections to Israel selling the advanced military radar system “Phalcon” to India, clearing the way for the delayed $1 billion deal to go ahead.

Washington persuaded Israel to suspend the sale in early 2002, saying it feared a flare-up between India and Pakistan. But with New Delhi and Islamabad now working on better ties, the United States has withdrawn its opposition, the Israeli newspaper Haaretz reported yesterday without citing sources.

Israel played down the report. “Negotiations with India have been under way since 2001. Nothing has been signed yet,” a Defense Ministry spokeswoman said. US and Indian officials were not immediately available for comment.

The Phalcon Airborne Early Warning, Command and Control Systems (AWACS), manufactured by Israel Aircraft Industries, provides commanders with the information they need to secure air superiority over a combat area.

It can be mounted on a variety of planes and can be used for border surveillance in peacetime.

The United States wields major influence over Israeli policy, including arms exports.

In 2000, Israel scrapped the sale to China of four early warning Phalcon aircraft at $250 million each, over Washington’s fears they could be used against US ally Taiwan.

Haaretz said the United States is also considering lifting limits on Israel’s exports of defense systems against ballistic missiles. This would allow India to buy Israel’s Arrow, the world’s only operational anti-ballistic missile system.

Israel developed the Phalcon without US help, but the multibillion-dollar Arrow is a joint project stemming from Washington’s 1980s “Star Wars” program.