Jerusalem, Dec 26: Israel and India are set to sign an agreement next month for the supply of three Phalcon early warning radar systems, produced by the Israel Aircraft Industries for the Indian Air Force. The final terms for the $1billion deal were agreed during the discussions he had with Indian officials in New Delhi earlier this week, Israeli Defence Ministry Director General Amos Yaron said.

Indian and Israeli negotiating teams will draft the agreement, which is expected to be signed in January 2004, Haaretz newspaper reported on Friday.

The IAI will receive an advance payment of some $350 million after the deal is signed, it said.

Meanwhile, Yaron extended an official invitation to Defence Minister George Fernandes to visit Israel.

A delegation of Indian officials is due to arrive in Israel in the coming weeks to explore new areas of cooperation, said Yaron, adding that Israeli defence-related exports to India totalled $400 m in 2003. Bureau Report