Israel and Croatia reached a tentative deal in March for the sale of the upgraded F-16 Barak fighter planes, pending U.S. approval to allow the American-made technology to be purchased by a third party.
The deal ran into trouble after Washington said Israel needed to strip off upgrades that were added after Israel took delivery of the aircraft from the United States some 30 years ago.
Relations between the Trump administration and Israel have been very close, particularly on defense issues. But the sale of the jets to NATO-member Croatia appeared to be an exception.
Croatian Defense Minister Damir Krsticevic said that Croatia now awaits the "best offer" from the U.S.
"I would like it to be new planes, preferably F-16s, even if it means fewer aircraft, considering our financial possibilities," Krsticevic said.