US Secretary of State John Kerry on Wednesday discussed a $2.1 billion deal with Omani leaders to supply an American-made air-defence system to the Arab state facing Iran in the Gulf.
Kerry told Oman's Defence Minister Sayyid Badr al-Busaidi that the United States was "excited" about the deal and "very grateful for your confidence in Raytheon," manufacturers of the defence system.
The two countries "are pleased to announce a deal for the acquisition of a US manufactured ground based air defence system," a joint US-Bahrain statement said later on Wednesday.
It said final negotiations were in progress with Raytheon Company and a "final conclusion of the deal is expected following agreements on the technical aspects of the system, through life support and maintenance and other related matters".
The system "offers high levels of effectiveness, capable of meeting the operational requirements of the Royal Air Force of Oman and providing seamless air protection by virtue of its cutting edge air defence technology," it added.
The details of the contract are still being worked through, and a letter of intent is to be signed "soon, but they are still finalising technical details," a State Department spokeswoman said, asking not to be named.
US officials said earlier that Oman had decided in January to buy a ground-based air defence system produced by US giant Raytheon, which is based in Kerry's home state of Massachusetts.
The new top US diplomat had strongly backed the proposed deal before he took office in February.
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"Part of the goal of this is to push US commercial interests, to demonstrate to Oman that these are important to this administration," another US official had said before Kerry arrived in Oman on Tuesday.
"We have initiated the talks" about the system, Busaidi said as he met Kerry in the defence ministry in Muscat on Wednesday for talks also attended by Raytheon senior director Ken Gordon.
The Omanis believed it was "the best and most effective system that is out there," Busaidi said
"Talks are underway at this point, and we are at the technical stages but we are hoping to move to the final discussion and sign a contract," he added.
"We are in need of this defence system, which also pertains to the defence strategy of the other countries of the Gulf Cooperation Council."
Sunni Muslim Arab monarchies of the Gulf have long had strained ties with Shiite-dominated Iran. These deteriorated further in early 2011 after a Saudi-led military intervention crushed Shiite-led pro-democracy protests in Bahrain, also run by a Sunni dynasty.
After his visit to Oman, Kerry landed in Amman to attend a key meeting of the "Friends of Syria" group being held on Wednesday.
He will travel to Israel for talks Thursday and Friday with Israeli and Palestinian leaders.