Israel has failed to overcome U.S. objections to its plan to sell 12 used fighter jets to Croatia and the $500 million deal will likely be canceled, Croatia’s defense minister said Thursday.

Israel reached a tentative deal with Croatia in March for the sale of the upgraded F-16 Barak fighters, pending U.S. approval that would allow the American-made technology to be purchased by a third party.

Croatian Defense Minister Damir Krsticevic said after meeting with Israeli defense officials in Zagreb on Thursday that “despite accepted obligations,” Israel failed to obtain the needed consent and his ministry “will propose to the government to make appropriate decisions.”

He said Croatia will not suffer financial consequences because of the failed deal, which was to be its largest single military purchase since it split from the Yugoslav federation in a bloody war in the 1990s.

The deal ran into trouble after Washington said that Israel needed to strip off the upgrades that were added after Israel took delivery of the aircraft from the United States some 30 years ago.

The sophisticated electronics and radar systems were crucial in Croatia’s decision to buy the F-16s from Israel instead of from the U.S. or Greece, which also bid for the contract.

Relations between the Trump administration and Israel have been very close, particularly on defense issues. But the sale of the jets to Croatia appears to be an exception. U.S. Secretary of State Mike Pompeo and Israeli Prime Minister Benjamin Netanyahu met earlier this month but didn’t agree on a way to end the impasse.

The director-general of the Israeli Defense Ministry, Udi Adam, traveled to Croatia on Thursday in an apparent attempt to save the deal.

He said at a joint media conference with the Croatian defense minister that “sadly, the conditions were not right (for finalizing the deal) because of the circumstances that were beyond our control.”

Israel is trying to get rid of its aging F-16s that will be replaced with more modern F-35 fighters.

Last week, Croatian Defense Minister Krsticevic said Israel provided “pre-guarantees” during the bidding process that U.S. officials would green-light the sale. The problems in carrying out the deal have brought calls for Krsticevic’s resignation.

NATO member Croatia faces a mini arms race with Russian ally Serbia, which recently received six used Russian MiG-29 fighter jets.

(AP)