A major obstacle blocking Israel's purchase of the F-35 Joint Strike Fighter has been cleared, perhaps signaling that the U.S. is relaxing its hard-line approach to exporting JSF technologies that may be crucial to securing additional foreign sales.

The U.S. has been cautious about sharing sensitive technologies for the stealth fighter, but existing program partners and international competitions—such as in Japan—are increasing pressure on it to do so. The breakthrough comes as more international JSF partners near buying decisions. However, the added numbers will likely have only little impact on the debate about the F-35 unit cost, since initial procurement numbers for non-U.S. buyers are relatively small compared to the Pentagon's purchases.

By far the most contentious fight over F-35 technology has centered on Israel, which wants to adapt the aircraft to use indigenously developed electronic warfare (EW) equipment. After strongly resisting this for some time, Washington now has agreed to allow Israeli F-35s to be rewired so that Israeli EW systems can be installed on the aircraft. That would allow Israel to gradually add indigenous EW sensors and countermeasures on its fighters once it receives its first squadron.

With that deal in hand, officials for both the Israeli air force and Lockheed Martin expect the $2.7 billion contract for the procurement of 19 or 20 F-35As will be signed by early next year.

“I believe that Israel could receive its first F-35s in late 2016,” Tom Burbage, Lockheed Martin's general manager of the F-35 program, tells Aviation Week. A senior Israeli air force official, who until recently was concerned about delays in the program, says the schedule agreed upon is “very satisfactory.”

The Israeli air force initially presented a long list of unique and costly requirements for the JSF, but it has accepted that its first F-35s will be almost identical to those of the U.S. Air Force, with only Israeli command, control, computers, communications and intelligence (C4I) systems installed in them. The plans to add Israeli EW systems, air-to-air and air-to-ground munitions as well as an external fuel tank, were approved in principle but will be deferred in order to protect the budgetary framework and delivery schedule.

Until recently, Israel insisted that only its own EW systems would be suitable to meet the developing anti-aircraft threat in the region, such as the deployment of SA-17 and SA-22 air defense systems in Syria. But now, claims the Israeli air force official, “the F-35s we will receive will be more than ready to meet those threats.”

According to the program schedule, Israeli F-35s will be manufactured within the seventh and eighth low-rate initial production (LRIP) lot. The LRIP 5 cost is being negotiated by the Pentagon and Lockheed Martin. “Israel could still be the first international customer to receive the JSF,” says Burbage.

One issue that remains to be settled between the two countries is when Israeli air force crews will begin training on the F-35s and on whose platforms. Burbage says training could commence in 2016, but it is for the Pentagon to decide which aircraft will be made available for Israeli training.

Facing a series of tectonic shifts in the region, some perceived as threatening, the Israel Defense Forces (IDF) are drafting a new work plan for 2013-17. The underlying assumption of the plan is that the dramatic changes in the Middle East could turn peaceful neighbors to the country's south, such as Egypt, and to the east, such as Jordan, more hostile to Israel. The IDF consequently aim to build a larger, more flexible force that will be capable of dealing with more than the traditional northern front of Syria and Lebanon. The Israeli air force claims to be the only service with that flexibility, and it calls for accelerating the plan to procure 75 F-35s by 2030.

In the coming years, the air force will begin decommissioning dozens of its aging fighters, such as F-16A/Bs and F-15A/Bs, and with only 20 new F-35s, its fighter fleet will reach its lowest point ever.

However, there is strong competition for funding. Israeli ground commanders argue that because of the potential threat that the giant and modern Egyptian army would be turned against Israel, it is necessary to establish an additional mechanized division, equipped with Merkava tanks and the new Namer armored personnel carrier. The production of the Merkava-based Namer was moved to General Dynamics Land Systems in the U.S. in order to enable Israel to procure them using U.S. military aid funding, the same funding source used to acquire the F-35s.

Still unclear is whether the U.S.-Israeli deal means Washington is recognizing that it needs to be more pragmatic in terms of JSF technology controls to secure international deals. Program officials do note that any foreign buyer will have the same level of stealth with which the U.S. will operate.

A key test of how much the technology transfer approach has changed will come in Japan, which recently issued a request for proposals for new fighters. Japan has specified a high degree of technology transfer and work on the program, with an expressed interest in a domestic assembly line. U.S. Air Force Maj. Gen. C.D. Moore, deputy director of the JSF program, says the government is working closely with Lockheed Martin and engine provider Pratt & Whitney to put together an attractive deal. However, he also points out that Japan has ranked capabilities as the most important source selection criteria, even ahead of industrial participation and life-cycle cost.

Australia and Italy are expected to be among the next countries ready to commit to buying JSFs, likely placing their first contracts as part of next year's LRIP 6 package. Turkey is expected to come soon after. Although the Norwegian government recently put forward a proposal to buy the first four F-35s of its larger procurement, the actual contract for that deal may not be signed for another three years.

Meanwhile, Denmark is planning a fighter competition and is expected to make a choice quickly. Pending elections in Copenhagen could even see an acceleration of the competitive time line. The F-35 would face stiff competition from the Boeing F/A-18E/F, Saab Gripen and Eurofighter Typhoon.