The US has expressed its inability to accept the demands made by the Israeli Defence Ministry to replace 50% of the systems in the F-35 fighter with Israeli-made technology.
The Israeli Air Force wants to acquire 25 F-35 stealth fighter jets, each costing nearly $130m, with the aim of boosting Israel's deterrence in the Middle East, according to jpost.com.
In a letter of request, submitted to the Pentagon in July 2009, the defence force demanded the right to install its own electronic warfare and radar systems on the fighter plane.
Israel has made this request in order to make the acquisition cost effective, as well as to give Israeli defence industries an opportunity to benefit from the JSF programme.
However, the US has rejected this demand, since it will prevent the installation of all of the systems the air force had requested.
The US wants to retain a qualitative edge over the F-35s that will be sold to its buyers.
Under the current JSF programme agreement, an F-35 buyer will have to send the jet to a maintenance centre, likely to be set up in Italy, on encountering any kind of mechanical malfunction.
The Lockheed-developed F-35 Lightning II, is a fifth-generation, single-seat, single-engine, stealth multirole fighter.
The F-35 will perform close air support, tactical bombing and air defence missions.