Washington and Baghdad have made significant progress on a deal for Iraq to buy Lockheed Martin F-16 warplanes but do not have a signed contract, according to Bloomberg.
In February the Iraqi government delayed its planned purchase of F-16s and diverted $900 million set aside for an initial payment on the aircraft into its national food ration programme to help ease shortages and cool nationwide protests.
Since then, the world oil price has remained above budget projections, and the oil producer has found itself reaping windfall profits.
Bloomberg reports that Prime Minister Nuri al-Maliki said on July 30 that Iraq would buy 36 F-16s, double the number it had originally planned, to shore up its weak air defences, contradicting previous assertions that the deal was abandoned.
"Our two governments are working out the details. They do not have a signed contract yet, but significant progress (has been made) towards it," Major General Jeffrey Buchanan said.
The two sides are negotiating on the F-16 Block 52 export model with sophisticated avionics and weapons, Buchanan said.
"If there is in fact a deal it would be the entire standard ... package which includes maintenance, training, training for the maintainers, training for the pilots," he said.
Lockheed Martin said in May it hoped to finalise F-16 sales to Iraq by early next year.
Buchanan said he did not know the value of the possible F-16 contract or whether Iraq intended to buy the 36 combat jets at once or over time.