Croatia officially cancels Israeli F-16 fighter jets order

Croatia's government on Monday formally cancelled a $500 million deal to buy 12 used fighter jets from Israel after it collapsed due to US objections.

Defence Minister Damir Krsticevic has said the Balkan country will restart its search for a suitable deal.

"I would like it to be new planes, preferably F-16s, even if it means fewer aircraft, considering our financial possibilities," Krsticevic said on Monday.

Israel and Croatia reached a tentative deal in March for the sale of the upgraded F-16 Barak fighter planes, pending US approval to allow the US-made technology to be purchased by a third party.

The deal ran into trouble after Washington said Israel needed to strip off upgrades that were added after Israel took delivery of the aircraft from the US some 30 years ago.

The sophisticated electronics and radar systems were crucial in Croatia's decision to buy the F-16s from Israel instead from the US or Greece, which also bid for the contract together with South Korea and Sweden.

Relations between the Trump administration and Israel have been very close, particularly on defence issues, however, the sale of the jets to Croatia appears to be an exception.

The deal was due to be Croatia's largest single military purchase since it split from the Yugoslav federation in a bloody war in the 1990s, however, Krsticevic said its collapse would not negatively impact upon the country's finances.

Krsticevic has faced calls for his resignation over the deal's collapse.

NATO member Croatia faces a mini arms race with Russian ally Serbia, which recently received six used Russian MiG-29 fighter jets.