WASHINGTON, Oct 1: Pakistan and the US have finalised the F-16 deal after resolving their differences over airspace and technology swapping restrictions Washington had placed earlier, diplomatic sources told Dawn.

The letter of offer and acceptance was signed in Islamabad on Saturday. Sept 30 was the last date for final acceptance of the US offer of March 25, 2005, when the Bush administration announced its decision to sell F-16 aircraft to Pakistan.

“Under the deal, even a day’s delay could have caused an increase of more than $140 million in the price,” said a diplomatic source.

The source said that there were also some differences on the money Pakistan is required to pay in advance. “All the differences, on payment installations, on technical restrictions, have been resolved to satisfactory level,” he said.

Asked to define the level of satisfaction, the source said: “Both sides had to accommodate each other before they reached an understanding.”

The deal is part of a $5 billion arms package for Pakistan which includes F-16 fighter jets and an assortment of air and ground weaponry.

The Bush administration has received congressional approval for selling 18 new F-16 jets to Pakistan. The deal also allows Pakistan to buy an additional 18 new or old F-16s.

In July, the US Defence Security Cooperation Agency notified Congress that the F-16s would come with 200 Sidewinder and 500 AIM-120C5 air-to-air missiles plus 800 general purpose 2,000 and 500-pound bombs.