On 8 February 1980, then defense minister Ezer Weizman approved plans for the development and production by Israel Aircraft Industries (IAI) of a single-engine fighter aircraft to be known as the Lavi. Although to be Israeli-developed and -built, much of the funding for the project was to come from the United States. The first full-scale mock-up of the Lavi was revealed at the beginning of 1985. The first Lavi (B-01) flew on 31 December 1986, piloted by IAI chief test pilot Menachem Schmoll. The project was cancelled on 30 August 1987 against the background of massive cost overruns ($1.5 billion had already been expended on research and development) in a period of severe fiscal austerity introduced in 1985 by the Government of National Unity. Prominent Israelis, including former defense minister Moshe Arens, charged that the United States pressured Israel to cancel production of the Lavi because it represented significant competition for the American arms and aircraft industry and because production of an Israeli jet fighter would reduce the country's dependence on the United States to maintaining its qualitative military advantage.
See also Kfir.
Historical Dictionary of Israel. Bernard Reich David H. Goldberg. Edited by Jon Woronoff..