China warns Israel over radar deal

BEIJING, China -- China has urged Israel to come up with a "satisfactory solution" after it bowed to U.S. pressure and canceled the sale of an advanced airborne radar system.

The two countries held their first round of talks this week in a bid to resolve the dispute, but made little headway, a Chinese embassy spokesman told The Associated Press news agency.

Former Premier Ehud Barak last year scrapped a deal to sell the $250 million Phalcon airborne radar system to China, after U.S. lawmakers threatened to cut the $2.8 billion it gives in aid to Israel each year.

U.S. officials at the time expressed concern that the radar system fitted on a Russian-built aircraft could give China an edge over Taiwan, which Beijing considers a renegade province.

Following the canceled sale, the United States asked Israel to consult with Washington before selling arms to certain countries.

'Take responsibility'

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China has said that because Israel broke the contract, they were responsible to recover any losses.

"We think the relevant country should take responsibility and come out with a satisfactory solution," the Chinese Foreign Ministry said in a statement, without suggesting what a solution might be.

The ministry said it was unable to confirm Israeli media reports that China was demanding $2 billion compensation from Israel for the cancellation.

Israeli officials also declined to confirm the figure.

Israel had agreed to sell China the radar system built on a Russian plane for $250 million. China had an option to buy up to three more planes.

The daily Yediot Ahronot reported on Monday that China was looking to recover losses from preparations made to receive the plane, which had already been built.

The Chinese had already paid $200 million for the first plane, the Chinese spokesman said.