The Israeli government contracted Dassault for 50 aircraft in September of 1966 and a prototype went airborne for the first time on May 19th, 1967. As finalized, the aircraft resembled the earlier Mirage III some but incorporated some slight changes to its design such as a repositioning of the nose-mounted pitot tube and the addition of two weapons hardpoints. By and large, the physical characteristics remained such as the single vertical tail fin, single engine installation, and low-set delta wings.
Because of mounting tensions in the Middle East theater, the French government (led by President Charles de Gaulle) was forced to restrict the sale of the new aircraft - named the Mirage 5 - to Israel through embargo in 1967 - this despite the aircraft having been paid for. With serial production already ongoing, it was decided to retain the new aircraft for French Air Force service and this begat the Mirage 5F designation. The Israelis were refunded their paid portion for the batch.
It is said that the Israelis reproduced the Mirage 5 by way of blueprints to produce their IAI "Nesher" model while others claim collusion between the governments of France and Israel to have the Mirage 5 aircraft delivered in parts as a way around the embargo - the Israelis simply rebuilding the systems.
Regardless, the Mirage 5 was another successful venture for Dassault though its production only reached 582 units compared to the over 1,400 Mirage IIIs realized. The base attack platform was followed by a dedicated reconnaissance platform in the Mirage 5R as well as the two-seat trainer-minded Mirage 5D. It was also possible to upgrade the existing equipment to bring the fighter role back into the Mirage 5 - thus creating a more complete fighter-bomber form. The simplicity of the aircraft also made it another favored Dassault product on the foreign market as overseas operators began to grow.
Belgium added to the growing production numbers (1968 onwards) through local manufacture of the Dassault 5 featuring U.S.-oriented avionics. Chile accepted these as the Mirage "Elkan". Local production of the aircraft also stocked Belgian attack, reconnaissance, and training wings. 20 of these were upgraded locally before being sold off to Chile.
An uprated engine, new avionics set (with Cyrano IV radar system), and improved performance specifications produced the Mirage 50 mark. However, this variant did not improve Dassault sales and was only taken on by Chile and Venezuela. Chilean Air Force aircraft were later upgraded through ENAER with help from Israel Aircraft Industries (IAI) to bring them to the "Pantera" standard (IAI previously brought about the Kfir for IAF service).
To date (2015), many Mirage 5s have been retired from frontline service - some rather recently.
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