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Israel Aircraft Industries (IAI) developed its Phalcon system for Israeli defence forces and for export. Airborne Early Warning, Command and Control (AEWC&C) systems play a major role on the modern battlefield by providing real-time intelligence and command and control needed to achieve and maintain air superiority over the combat area and to enable surveillance of borders in peacetime. The world's most advanced AEWC&C system, the PHALCON, was developed and produced by ELTA using Active Phased Array Electronic Scanning Technology rather than a mechanically rotating antenna (rotodome) used by current AWACS systems, giving PHALCON greater operational flexibility and performance by several orders of magnitude. The Phalcon AEW&C aircraft is based on four sensors: phased-array radar, phased-array IFF, ESM/ELINT and CSM/COMINT. A unique fusion technology continuously cross-relates the data gathered by all sensors. When one of the sensors reports a detection, the system automatically initiates an active search of the complementary sensors.

The aircraft communicates, via its data link, with Air Defense HQ. Data from additional air defense sensors are fused to create a complete spatial picture.

The PHALCON systems can be installed on a variety of platforms, such as the Boeing 707, Boeing 767, Boeing 747, Airbus and C-130. This system has already been sold to Chile, where it is designated "Condor". Under the aegis of Defense Minister Yitzhak Mordechai and Defense Ministry Director General Ilan Biran, six agreements for cooperation between Israeli, American and European defense firms were signed on 15 October 1998. Under one of these agreements, IAI/ELTA Electronics Industries Ltd. and Raytheon Systems Company will cooperate on the development, production and marketing of AEWC&C systems on a world wide basis. The new project will be based on PHALCON. The two companies have already teamed up to compete for tenders for AEWC&C systems for Australia, South Korea and Turkey.