Details of the U.S. military incentives to Israel included a donation of 20 JSF aircraft. In September 2010, Israel signed an agreement to purchase 20 F-35s for an estimated $2.7 billion.

The U.S. offer, first reported by the Israeli government in November, was greeted with silence in Washington. After nearly a week, administration officials said Israel had been offered additional JSF aircraft in exchange for an agreement on the establishment of a Palestinian state.

At the same time, Congress approved an administration request for $205 million in U.S. funding for Israel's new Iron Dome short-range missile and rocket defense system. The allocation was expected to finance the production of at least eight Iron Dome batteries.

"This funding sends a strong message, to both our enemies and allies, by providing more total dollars than ever before toward these rocket and missile defense programs," said Rep. Steve Rothman, a New Jersey Democrat and member of the House Appropriations Defense Subcommittee. "This is only the latest example that when it comes to defense, military, and intelligence cooperation, the relationship between the U.S. and Israel has never been stronger."

Officials said the U.S. proposal was bogged down by complaints from Congress as well as Israel's insistence that the JSF offer be set in a formal document. They said that more than a week of negotiations between Israel and the administration for a 90-day freeze failed to make progress.

"We are going to look for a different mechanism," another official said.

In 2008, the United States approved an Israeli request for up to 75 F-35s. But Israel delayed the signing of a Letter of Offer and Agreement amid Washington's refusal to allow Israel to install indigenous electronic warfare and other systems on JSF.

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