Israeli F16 fighter
© (REUTERS/Amir Cohen). (photo credit: REUTERS/AMIR COHEN)
An Israeli F16 fighter jet takes off during a joint international aerial training exercise hosted by Israel and dubbed "Blue Flag 2017" at Ovda military air base in southern Israel November 8, 2017. Picture taken November 8, 2017.
After months of delay, a $500 million deal between Israel and Croatia to buy F-16 fighter jets is officially dead because of "unforeseen problems," Israel's Defense Ministry announced on Thursday night.

Croatia, a NATO member, was preparing to buy 12 used F-16 Barak fighters from Israel in order to replace its aging fleet of Soviet-designed MiG-21s, which had originally entered service in 1959.

"The Ministry of Defense attaches great importance to the deepening of cooperation between Israel and Croatia, and initiated the project of the F-16, which includes Israeli know-how and technology, which was conducted professionally in the framework of the GTG deal between the two countries," said director-general of the Defense Ministry Udi Adam while on a visit to Zagreb.

"Croatia has acted professionally and judiciously all along the way. Unfortunately, we have not been able to realize the deal because of problems that could not have been expected and are not under the control of the countries," he added.

The planes, which originally were bought from the United States, have been upgraded with Israeli technology. Washington reportedly insisted that they be returned to the form in which they were sold to Israel - without the advanced electronic systems - before being sold to Croatia.

The sophisticated electronic and radar systems had been a crucial factor in Croatia's decision to buy the planes from Israel, rather than straight from the US, which was reportedly furious that Jerusalem would unfairly profit from the deal.

Croatia was also reportedly furious about the holdup of the sale and had given Israel until January 11 to clear the deal with Washington.

Prime Minister Benjamin Netanyahu, who was eager to push through the deal, raised the issue when he met with US Secretary of State Mike Pompeo in Brazil. According to reports, the prime minister was unable to change the secretary's mind.

In early December, the Balkan Investigative Reporting Network (BIRN) quoted the US Embassy in Zagreb as saying that the US had been actively working with Israel and Croatia on the details over the past year.

"We have been working with Israel for over a year on the details of the proposed F-16 transfer. Over the course of our discussions, we have been consistent and clear about the technical conditions under which we could approve the transfer," the embassy was quoted by BIRN as saying, adding that "the United States remains firmly committed to supporting Croatia's desire to modernize and upgrade its air force by purchasing aircraft that are interoperable with its NATO allies."