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GucciBoth Iraq and Oman signaled their intent last year to buy the jets through government-to-government transactions. William McHenry, who heads F-16 business development for Lockheed, said contracts were put on hold after political instability prompted both governments to rethink the timing

Louis VuittonMr. Maliki's government froze its deal and redirected the money to social programs, U.S. officials said.

Vibram Five Fingers"In general, the regional stability has settled down," Mr. McHenry said. "Both of those customers still have the requirement [for the aircraft] and have revived those discussions.

Mr. McHenry did not say when he expected a final agreement to be signed between the U.S. and Iraqi governments. He said a deal could potentially be concluded in the coming months. He declined to speculate on whether the Iraqi government might seek more F-16s beyond the 18 originally sought, but said the arms package the administration submitted last year to Congress would create training programs and other infrastructure that could be expanded to accommodate a larger fleet.

"Should the two governments expand that relationship in the future, that infrastructure could be leveraged to expand," he said.

Maj. Gen. Jeffrey Buchanan, spokesman for U.S. Forces-Iraq, attributed the change of heart in part to an unexpected rise in Iraqi oil revenue in the first six months of this year, which he estimated has added at least $10 billion to government's coffers.

He said the decision to renew the talks was also based on the fact that Iraq has been "looking very hard at its readiness capabilities and one of those parameters is... the need to be able to defend the airspace."

In Afghanistan, President Hamid Karzai has likewise seized on the U.S. troop withdrawal schedule to press the case for fighter planes, but the response from the Pentagon has been cool. Washington told Kabul that what it really needs are helicopters which are more useful in waging a counterinsurgency campaign against Taliban militants, and which cost far less than jets, a senior U.S. defense official said.

In contrast to Iraq, which has vast oil riches, Afghanistan will need to look to the U.S. and other Western allies to "defend their external frontiers ... for years to come," the official said. Kabul depends on international aid and any big-ticket military sales would likely have to be paid for by the U.S. and other wealthy donors.