(about 43 miles) north of Athens. Israeli defense officials announced a 1 billion US dollar deal Thursday, Feb. 16, 2012 to buy 30 Italian military training jets.(AP Photo/Petros Giannakouris, Files)

JERUSALEM - Israel has reached a $1 billion preliminary deal to buy 30 Italian military training jets, Israeli defence officials said Thursday.

The agreement, which still needs formal government approval, marked the end of a long competition between Italy and South Korea over the lucrative sale.

Israel announced it would buy the M-346, made by the Italian company Alenia Aermacchi and designed for low-cost flights. The aircraft will replace American Skyhawks, which the Israeli Air Force has trained with for 40 years.

Italy will reciprocate the Israeli purchase by buying $1 billion in Israeli defence equipment, Israel's Defence Ministry said.

The ministry's director general, Udi Shani, said the offset deal enabled Israel to make the large purchase in a "harsh budgetary reality."

South Korea hoped to sell its T-50 aircraft to Israel and had issued a $1.6 billion counteroffer including buying the expensive Iron Dome anti-rocket system, defence officials said. As Israel considered its options, South Korea complained about a lack of transparency in the deal.

The officials spoke on condition of anonymity because they were discussing internal deliberations.

In a letter to South Korea, Shani wrote that "after close analysis of both the proposals, and at the conclusion of a long and comprehensive review process, it was decided that the Italian proposal was the most efficient choice for Israel's Ministry of Defence."

He cited the suitability of the jets to the "direct needs" of the Israeli air force, the cost and the "significant offset conditions."

The deal only has initial approval and needs official authorization from Israel's defence minister, the government, and the Israeli parliament.

The Defence Ministry said the agreement is expected to be approved, and the planes are to be delivered in 2014.