This memo from Under Secretary for Political Affairs Walt Rostow to President Johnson outlines the terms of the sale of Skyhawk aircraft to Israel.
Just to give you a full response to your queries Sunday, the Israelis and Defense signed the agreement on January 30 for 40 more Skyhawks. They did this on the basis of your statement to Eshkol that you would add 27-30 Skyhawks to the present agreement - or another 10 if needed. Israel asked for 40.
I think we get two things out of this:
First, for the first time we have made a 100% cash sale to Israel for arms $60 million. They were in a hurry since the contract had to be signed by 1 February to take advantage of the production line arrangements Secretary McNamara worked out at your request.
Second, we will take advantage of your having gone the extra mile with Eshkol in our coming approaches to Eshkol and Eban to get the Jarring exercise off dead center.
Third, with this response and our generous handling of General Hod we seem to have bought a calm on the subject of aircraft for Israel. It remains to be seen, but we hope we may also have bought quiet at least from the Israelis themselves on our Jordan arms package.
In addition, you should know that Generals Hod and Wheeler had a good series of talks. Hod went back to Israel to do some homework and sent four of his officers back for technical discussions. If any cover was needed, the negotiations for the added Skyhawks provided it. Now General Wheeler is waiting for the final answers he needs from Hod to prepare the memo you asked for following the Eshkol visit.
One other point you should be aware of is that Secretary McNamara has married the current Skyhawk production line to the new one so as to slow the present one slightly but complete delivery of all Skyhawks by January 1970. This means that 4 were delivered in December; 28 will be delivered in 1968; 56 will be delivered in 1969 and January 1970. This pushes 16 originally scheduled for 1968 delivery into 1969, but the Israelis have agreed.
Sources: Foreign Relations of the United States, 1964-1968, V. 20, Arab-Israeli Dispute 1967-1968. DC: GPO, 2001.