Jolted by Vote, U.S. Asks Israel to Give Up Lavi

WASHINGTON — The Reagan Administration, jolted by an extraordinary Israeli parliamentary vote backing the Lavi warplane, urged the Jerusalem government Tuesday to cancel the controversial aircraft that has become so expensive that it cannot be financed without crimping other vital defense projects.

Although U.S. criticism of Israel’s plan to design and produce its own high-performance jet fighter is not new, recent developments in both Washington and Jerusalem seem to be pointing toward a rare confrontation between the United States and its closest Middle East ally.

Almost all of the money for the project comes from the United States in the form of military aid. About $1.5 billion has been spent so far and, according to the latest estimates, the production of 300 Lavis would cost the American taxpayer $2.5 billion more than the tab for supplying Israel with the same number of U.S.-produced F-16 jets.

‘Best Interests of Both’

“Given the budgetary realities we and Israel face, we believe a decision by Israel to terminate the Lavi would be in the best interests of both our countries,” State Department spokesman Charles Redman said.

“Both the United States and Israel estimate production costs of a magnitude which could not be funded within our security assistance program to Israel without crowding out other important projects,” he added.

Redman’s comments were prompted by the endorsement of the plan Sunday by an unusual joint meeting of the Defense and Finance committees of the Israeli Knesset. Although the parliamentary action is not binding, the 20-6 vote with three abstentions strengthens the hand of advocates of the project in advance of the Cabinet’s decision--expected next Sunday--on whether to continue or scrap the airplane.

It is not clear what the United States could do if Israel rejects its advice. Some Israeli newspapers have suggested that Washington might slash Israel’s foreign aid allocation, but a State Department official dismissed that speculation as “a lot of smoke.”

“If they make the choice to go with the Lavi, they wouldn’t have very much left over for other projects,” he said.

The official said that the Lavi could cost as much as $1 billion a year if it goes into full production, in the 1990s. Israel currently receives about $3 billion a year in U.S. aid with $1.8 billion of that earmarked for military projects and the rest intended to support the country’s beleaguered economy.

The Lavi project originally was approved in 1980. Three years later, spokesmen for the government-owned Israel Aircraft Industries told The Times that the warplane would cost substantially less than the F-16, its closest American counterpart.

At the time, these spokesmen said that the Lavi would lack many of the high-performance features of the F-16, although it would be a decade newer. For instance, the maximum speed of the Lavi is Mach 1.85 or less than twice the speed of sound. The F-16’s top speed is more than Mach 2.

U.S. officials say that the Lavi remains a less capable warplane than the F-16, although it is now expected to cost much more. The Israeli air force already is equipped with F-16s, produced by General Dynamics Corp. of St. Louis. The Israelis also fly the McDonnell Douglas F-15, a more sophisticated and more expensive plane than the F-16.

Despite the cost, the Lavi project is supported by many Israeli political leaders, including Prime Minister Yitzhak Shamir and Foreign Minister Shimon Peres, who consider it an issue of national prestige. Hundreds of jobs would be lost if the project is canceled.