LOL, that’s a popular myth but completely baseless. The J-10 shares a configuration similarity with the Lavi but is clearly derived from the MiG-21 and has no similarity to the Lavi’s aerostructure and engine. Also the design of the wings on the Lavi were subcontracted to Grumman which is NOT a French company.
The Lavi was designed in Israel with the US to pick up most of the bill. The costs escalated immensely which created a lot of disquiet in Israel which in the end killed it. The only reason it went so far was because a former IAI head was a Government Minister. They could have built it much, much cheaper but IAI is not exactly a lean company. Also the domestic engine builder was a shambles with no capacity to build an advanced turbofan which was going to cost hundreds of millions to bring up to speed.
Lavi was mostly domestic, particularly in the avionics side and in the all composite aerostructure. Avionics that live on today and are the cornerstone of much of the Israeli weapons export.
As to the Israeli capacity to build a stealth aircraft Adrian Wainer’s comment is on the money. I put this very question to the GM of IAI Malat in his office a few years ago and his response was rather sheepish…
Well I'm no expert, though served in the Israeli infantry brigade (well, didn't see many Lavis but much Black Hawks and CH-53ׁ-however, few things I can tell for sure: First, the Lavi was called off due to American pressure, foreign sources won't tell it but many, many many Israeli sources who familiar with all of those who were involved in this cabinet decision know well that it wasn't the money. Also, the present head of the IAI, son of the former prime minister Yitzhak Shamir and an IAF colonel for himself, told again-it wasn't the money, but American pressure-so I can't see how you contradict that...Also, heavy American pressure to limit Israel weapon industry is far too common-especially when democrats are at the oval office...
Maybe the all issue of the J10 is a myth, but it is heard too often and by reliable defense sources-also, don't forget that it was Clinton administration who put heavy pressure on Israel to cancel the billion dollar deal with Chinese in 1999 (Israel was supposed to sell China AWACS system of the IAI which was considered then worlds best ) the cancellation degraded the relationships between Israel and China dramatically-As I know through third person Ora Namir, who was Israel's ambassador in China -I know for sure that she saw it as a very bad mistake-but till then, Israel had extensive cooperation with the Chinese and aside for you dismissing it with a wave -You didn't tell why I'm wrong.
I admit that I made few mistakes, as for the delta wings-just because I wrongly remembered that once I read French company handled the manufacture and design of the delta wings.
As far as I know, Beit Shemsh factory still building turbofans, at very good quality (well, they serve very well the Israeli Air Force, and the IAF standards are very very high even when compare to other western air forces) if I'm not mistaken, the turbofans are being sold world wide-I didn't hear about the mess you are telling about-at least not during the last 20 years.
Just consider how much USA spent on each of its projects and you will find that the American companies do not enjoy any superiority of effectiveness in terms of developments costs-I wonder if their is any air craft it took the USA less than 10 billion dollars to develop-usually much more-the Lavi was very cheap even then, when compare to the development costs of the F-16 for instance. It was big relative to Israel whose economy was back then much smaller.
The THAAD is based heavily on the Arrow technology, so it said, the Arrow project cost between 1.5-2 billion dollars do you have idea how much the THAAD cost?
Finally, maybe the IAI CEO was bewildered when you asked him few years ago-but few years have passed and I also think that we now have new CEO and new PM and new military doctrines and we also passed the second Lebanon war which shacked few things here, not to mention that Iran is in Israel national new almost on daily basis-it wasn't like that few years ago. Also, consider that for instance, after Clinoton reject Israel request to buy Tomahawks -Israel developed cruise missiles with similar capabilities in less than a year though initially it had no such intend. (this claim is very well sourced, also by the US navy intelligence).
Israel UAVs program is so far, more advanced than those of French and UK-and now they develop stealth UAVs-I can't see why would Israel like to stay behind. It bought, in bad deal if you ask me, 25 F-35 recently-at the beginning the media told about 75 air crafts (25 in the first deal plus option to additional 50) so where did the 50 disappear? Well, Obama is not willing Israel will develop and install its own systems into it so maybe Israel decide not to buy 50 more, but to spend the money on local solutions -like highly advanced UAV which are cheaper to build, operate and develop than manned air craft -but also enjoy increasing communication saftyness , autonomy and their payload and speed are just increasing- who knows, but again, if French can build stealth UAV there is no reason to assume Israel can't.