In December 1998, U.S. officials said the United States has reached agreement with Pakistan on how to compensate Pakistan for its aborted purchase of U.S. F-16 fighters. U.S. would compensate Pakistan for the $658 millions it paid for purchasing 28 F-16 fighters while Pakistan agreed to give up the demand of having the plane delivered. The agreement ended 8 year long dispute between U.S. and Pakistan government about the Jet fighter purchase.
During 1988-1989, Pakistan ordered 28 F-16 Jet fighters from United States. But due to the reason that Pakistan got involved in a controversy with the United States over its suspected nuclear weapons capability and refused sign the Nuclear Non-Proliferation Treaty, the United States government announced on October 6, 1990 that it had embargoed further arms deliveries to Pakistan. Since Pakistan had already paid $685 million on the contract for the 28 F-16s, it insisted on either having the planes it ordered delivered or getting its money back. The dispute lasted for 8 years, and finally came to an end with the reach of the agreement in 1998.
|A great deal of information about the aborted purchase can be found here|